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Shady partner

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kwhit

Junior Member
What is the name of your state?New York.......My husband and a so-called friend of his started a partnership business together (there was no written agreement between them...only verbal) I basically ran the business, getting new clients to make the business profitable. The partner had the only access to checking account (only signer). My husband has been leary about him for awhile and finally decided to end the partnership thus dissolving the business. His x-partner then opened the business in another name. None of the clients have been notified of the name change and he will be receiving checks for invoices that will be made out to the old business. Can he keep these and deposit them into the checking account (for old business)? I cannot get our x-partner to return any phone calls. I have been into office since then and today he had taken all the clients names and phone numbers off my desk and locked the file cabinet so I couldnt get in it. He will not return any phone calls. Legally is my husband entitled to any assets, profits up to the day he signed off? There are no liabilities involved, only just small office expenses,,,,phone, supplies, etc. Also his accountant did the taxes and we have yet to see them although I have asked on several occasions...We need some advice...can we go after him legally? Your responses are greatly appreciated. Thank you
 
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fronty

Member
Your husband should have had an accounting done during the dissolution of the partnership. Did he get his own accountant and lawyer during this process? A partnership agreement does not have to be in writing; it can be an implied partnership through conduct. Was the business jointly owned? Did the share in the profits and losses? Did they have equal management right? If so, the business is a partnership and your husband was entitled to full disclosure. I’m not sure if your state has adopted the UPA/RUPA (uniform partnership act/revised uniform partnership act) or not, but you can go through a search engine and find that information out for yourself; it will tell you what rights you have. If your husband’s partner violated his fiduciary duties as a partner, your husband is entitled to compensation from those actions and any possible future compensation that stems from missed opportunities your husband may have had due to his partners misappropriations. If there is a decent amount of money involved, I would contact a local attorney to help you through this matter. There could be a lot of money/business transactions that your husband doesn't know about. If he diverted partnership funds to any other business opportunity or investment, your husband is entitled to half of that also.


kwhit said:
What is the name of your state?New York.......My husband and a so-called friend of his started a partnership business together (there was no written agreement between them...only verbal) I basically ran the business, getting new clients to make the business profitable. The partner had the only access to checking account (only signer). My husband has been leary about him for awhile and finally decided to end the partnership thus dissolving the business. His x-partner then opened the business in another name. None of the clients have been notified of the name change and he will be receiving checks for invoices that will be made out to the old business. Can he keep these and deposit them into the checking account (for old business)? I cannot get our x-partner to return any phone calls. I have been into office since then and today he had taken all the clients names and phone numbers off my desk and locked the file cabinet so I couldnt get in it. He will not return any phone calls. Legally is my husband entitled to any assets, profits up to the day he signed off? There are no liabilities involved, only just small office expenses,,,,phone, supplies, etc. Also his accountant did the taxes and we have yet to see them although I have asked on several occasions...We need some advice...can we go after him legally? Your responses are greatly appreciated. Thank you
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K

kwhit

Junior Member
Shady Partner

thank you for your response. The business was jointly owned and they shared in profits and losses equally. I really feel I need to contact the clients and make them aware of what is going on so they do not send in money that he is obviously going to keep for himself. Should I do this? So as I understand it if he receives any monies for the dissolved partnership and deposits that money into a new account my husband is entitled to his share? I'm assuming that a new account would have to be established since the business was dissolved? I need as much ammo as possible before we confront him. But I really dont believe there is any money left in original account and that is why he is avoiding us. Thank you again
 
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fronty

Member
I wouldn't confront him yourself. You should have a competent attorney handle this matter. One of the problems associated with sole proprietorships and partnerships is that they don't seek professional advice. By not seeking the advice of your own attorney and accountant, your losses are going to be significantly higher than the fees they will charge you. The ex-partner is seeking the help of a professional (accountant); you should do the same. Partnerships can get ugly when the owners do not agree. If he is making misappropriations he will have to compensate you for your damages. For example, let’s say he bought real estate using partnership funds and did not disclose the investment to your husband during the partnership or during dissolution. Your husband is entitled to half of that investment. Therefore, if you think the partner has made any misappropriations, it is worth seeking professional help.




kwhit said:
thank you for your response. The business was jointly owned and they shared in profits and losses equally. I really feel I need to contact the clients and make them aware of what is going on so they do not send in money that he is obviously going to keep for himself. Should I do this? So as I understand it if he receives any monies for the dissolved partnership and deposits that money into a new account my husband is entitled to his share? I'm assuming that a new account would have to be established since the business was dissolved? I need as much ammo as possible before we confront him. But I really dont believe there is any money left in original account and that is why he is avoiding us. Thank you again
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note4me

Member
I'm sorry to hear about the shadiness. I"m going through that myself and learned that the person who was somewhat of a business partner has written bad checks and forged it in my name. I didn't think he would do that since the accounts were closed due to nonpayment, which was his fault as well. I suggest that you talk it over with the account. And since he moved, set up your own business name license and everything like business checking accounts and let the other bank account know that the only person held responsible is that person.
 
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