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    4 Replies Latest reply on Sep 13, 2009 9:17 PM by azula999

    My business partner is a theif....

    tciv70 Newbie

      Started 50/50 owned s-corp about 21/2 yrs ago. The business is heating, A/C, and plumbing. I found out recently that he had a customer pay an invoice directly in his name--about 5k. To the same customer he sold equiptment and billed directly for another 2k.--He has borrowed money in the past for many different reasons, and never paid a cent back--hes owes the corp. a lrge sum at this point.--do I have a case with all the theft???--I have only explained the most recent activity...There is more.FYI--I do have a lawyer working this now--Am I right in thinking i should press charges?
        • Re: My business partner is a theif....



          First, let me say that I am not a lawyer, but I have owned my own businesses both as an individual and with partners. When your partner had the customer pay him directly, did he use materials that the s-corp paid for? Did your partner pay for the equipment with his own money that he sold to the customer or did he use funds from the s-corp? If your partner is profiting solely from activities that the s-corp paid for, then you should have a strong case. However, if he pursued business on his own (whether competing or not) that he solely funded, then you may not have recourse unless the two of you signed some form of non-compete during the formation of your business.


          I believe that you made the wise choice by getting a lawyer involved, however, watch to make sure that your legal fees don't exceed the money that you could possibly recoup. Lawyer's fees add up quickly.


          I recommend that you get as much physical evidence as you can to build your case, plus ask your lawyer's opinion on what you should do about protecting any current cash that your partner may have access to.


          Hope this helps.


          Doug Dolan


          The Solopreneur's Guide


          1 of 1 people found this helpful
          • Re: My business partner is a theif....
            DomainDiva Ranger
            You are a little late in taking action. He should have been gone when the first problems were noticed.
              • Re: My business partner is a theif....
                tciv70 Newbie
                Diva--I know, he should have been gone long ago--

                He did not purchase anything on his own--all bought through the company owned accounts--can verify everything--right down to the serial # on the equipment. The invoice was a company invoice that the customer admitted he paid direct in my partners name. I have a paper trail for everything. Thanks for the reply.
              • Re: My business partner is a theif....
                azula999 Newbie
                I also have several partnership in my days. It is hard to have a good partner like the Hp partners. Unless you know him or her very well, don't even think about getting into a partnership. Even if you do know him or her, you always will have problems. My advise is to dissolve the partnership ASAP. To do that, you need to prepare what you are willing to do. What I always do is to propose to buy him out at a certain price that you feel comfortable with and offer him to buy you out at the same price. Chances are that he will not and so you pay him the price you offered and dissolve the partnership in a friendly way. It always worked for me. Hope it will work for you too. Good luck!