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socrateaser, Lawyer
Category: Legal
Satisfied Customers: 39029
Experience:  Retired (mostly)
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I own a trucking company with a partner - 50/50 LLC S corp.

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I own a trucking company with a partner - 50/50 LLC S corp. I've identified so far $11,000 he's spent out of the company checking account (we're joint holders) on personal expenses, like credit card payments, liquor, online pharmacies, pornography site subscriptions, video game systems, car stereo equipment etc. Yes, I do mean etc. Added to my misery is the fact he doesn't work. He comes into the office approximately 6 hours per week.
From my understanding so far I have no legal protection from him destroying the business I've been investing my life in because by virtue of one signature he's entitled to behave as irresponsibly as he wishes. But it gets worse.
I've also discovered through all of this that he is a sex offender on probation for lude and lacivious battery on a 12-15 year old. So many of the purchases he's made actually violate the terms of his probation. (He's already gone to jail several years back before we met - for violating his probation by purchasing pornography.)
What happens to me and my business if he ends up in jail or prison? Is he entitled to 50% of everything even if he's physically unable to contribute in any way? Not that anyone would notice a change - but I'm desperate to seperate from this guy. I really made a mistake. ?
Ultimately, you can sue for a dissolution of the LLC, distribute the assets and go your separate ways. Meanwhile, if your partner is in jail, you can reimburse yourself for one half of the value that he has stolen from the LLC without your consent.

Your parter is still entitled to 1/2 of the business profits, but if he's in jail, then no one could stop you from closing the doors on this business, starting a new one and servicing the same customers.

He could claim breach of fidcuiary, but what of it. He won't have any money to sue you with when he gets out, anyway.

So, you have options.

Hope this helps.

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Customer: replied 6 years ago.

Follow up - just found out he's signed over "power of attorney" to an attorney in the event something "happens" to him (I told him to pay the company back or I was going to call his probation officer and offer to have him review our checking account and email service.) What does this mean? Am I now partnered with an attorney?

I don't understand what this means.

Florida law permits a member of an LLC to delegate authority to another person via a power of attorney. So, yes, you are partnered with the attorney, unless you have a written operating agreement that your partner signed which prohibits anyone other than the original members from exercising management and control over the business operations.

This could be problematic, but if we assume that the attorney is neither a scumbag or a moron, then it may be a net improvement for the LLC. You can bet that the attorney will not be plundering the LLC assets.
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