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You just discovered your partner is stealing from the business: What now?

On Behalf of | Jul 23, 2021 | Business Law |

You wouldn’t have gone into business with your partners unless you trusted them — but your trust has been misused and outright broken.

One of your partners has been actively dipping into the accounts for their own expenses. You know you need to act fast to limit the damage to your business.

What legal options do you have?

Every situation can be different. If you caught the situation early enough, you may prefer to quietly settle the issue by having your partner repay the company and step down. If that’s not really an options, you can look to these solutions:

  • Suing over the breach of fiduciary duty: Every business partner owes a certain duty to their company, and stealing the company’s funds is a violation of that duty. You can pursue a civil claim in court to remove your partner and recover the company’s losses.
  • Pursuing fraud charges or a civil claim: If your partner lied to you and you relied on that lie to your detriment, that’s fraud. You may be able to pursue a claim in civil court, and a prosecutor may be inclined to press criminal charges, as well.
  • Filing an embezzlement complaint: If your business partner just quietly shifted money from the business accounts to their wallet, you may not be able to prove fraud — but you might be able to prove embezzlement.

Generally , it’s better to consider all of your legal options when there’s major fallout with a business partner and possible criminal activity. You don’t want to head straight to the prosecutor’s office with your allegations until you consider what’s best for your business as a whole.