Corporate Law Corporation co-ownership

[Mullerita]

My husband and I are co-owners of a corporation that owns a photography studio which takes care of portraits, weddings, and sports. I just found out that my husband has decided to seperate the Sports business from the Portraits and the Weddings and run them as two seperate businesses. But instead of opening a new business under the corporation - he went and applied for a new business license as a sole proprietor... along with a seperate bank account. Now the Sports business is not under our corporate umbrella. We are still in the same shared office space, shared website, shared employees. Our studio/company name is Artiem Photography and he named this new Sports business Artiem Sports Photography. Now deposits that would be going into our shared corporate account are being deposited into this new Sports business that the corporation has no access to. BUT - the Sports COSTS (labor, printing, shared office space, etc.) are still all being paid out of the shared corporation account.

I have concerns that this whole scenario isn't even legal.

 

[dee_dub]

It might be a form of fraud or theft from your LLC. More likely, it's simply contrary to whatever contractual arrangements, bylaws, or other documents you have governing your business. What do those say about spinning off lines of business?

 

[Mullerita]

Let me check those papers and get back to you! Thanks for the response!