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Tobin O'Conner & Ewing Practicality in Practice
  • ~ Washington DC Business Law Attorneys ~

What to Do When You Suspect That a Business Partner Is Stealing from Your Company

Legal13

A business partner does not have to be your best friend, but choosing someone as a partner when forming a company requires a high level of trust.  If the business partner betrays your trust by stealing or misusing funds that belong to the business, it can throw your financial plans for the future into disarray.  Whether or not you decide to end the business partnership because of the stealing or misuse of company money, you should work closely with a lawyer and avoid taking matters into your own hands.  These are some dos and don’ts for dealing with theft within your company.  The sooner you consult a Maryland commercial litigation lawyer about suspected theft by a business partner, the more easily you can resolve the matter.

DO: Document Everything

If money is missing from your company’s accounts for unexplained reasons, you should make detailed records of all the money coming in and going out.  The more rigorous your company’s policies for documenting expenditures, the better you can protect your business from embezzlement.  If the theft is already occurring, you should at least document how much money went missing and when.  Compare transactions from your bank account to employees’ pay stubs and receipts from vendors.

DON’T: Make Unsubstantiated Accusations

Angrily accusing a business partner of stealing when you do not have solid proof will not solve anything.  It will only make you seem like a bully, and if there is a good explanation for where the money went, it will make you look like the kind of boss who loses his temper first and asks questions later.

DO: Discuss Your Options for Legal Remedies with a Lawyer

You should discuss the situation with a commercial litigation lawyer as soon as you realize that there is a serious problem.  The lawyer can advise you on whether it is best to file a lawsuit, whether to get rid of the dishonest business partner buy buying him out, or some other option.

DO: Rely on Your Company’s Articles of Organization

Some business structures require a company to file articles of organization before it begins doing business.  If your articles of organization contain provisions about how to deal with misconduct by a partner in the company, you must follow these provisions.  If you do not, you will make yourself vulnerable to being sued.

DON’T: Make Empty Threats of Criminal Penalties

Stealing from a company is embezzlement, and falsifying a company’s financial records is fraud.  These are both crimes; depending on the amount stolen and the damage caused, they can be felonies punishable by long prison terms.  Do not, however, threaten in the heat of anger to have your business partner arrested.  After meeting with a commercial litigation attorney, you may decide to press criminal charges related to your business partner’s dishonest dealings, but that is not a decision to make by yourself.

Let Us Help You Today

Business disputes about missing money can get messy, but a commercial litigation attorney can help defend your rights and ensure that you stay within the limits of the law.  Contact the Washington DC commercial litigation lawyers at Tobin, O’Connor & Ewing or call 202-362-5900.

https://www.tobinoconnor.com/what-to-do-if-your-washington-dc-business-receives-a-cease-and-desist-letter/

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