Corporate Law thief in corp.

[Arielmoon]

i am a co-owner on a corporation, and just find out that my partner is doing side jobs and keeping 100% profit pretending its from our corporation...giving customers contracts from our business and not telling anyone ? we discovered contracts made him, with customers that have paid him for our services and he has not submitted, instead hides them.. is there any legal action i can take to maybe have him removed from corporation?????

 

[Michael Wechsler]

Definitely - also take a look at your articles of incorporation. If he's been paid for corporate services, you may also wish to discuss with him reporting this to the State Attorney General and District Attorney for prosecution for theft. You may first wish to discuss this with an attorney and file suit in order to prevent your new "ex partner" from moving the ill begotten money.

 

[Arielmoon]

thank you so much for your help... just wondering before i take any actions.. is there a possible chance i can remove him from the corporation w/out paying him off for his shares in the corporation or will i have to pay him off??

 

[Michael Wechsler]

I don't know what your bylaws say and if he owns shares and is a registered owner you may not have the authority to do so unless with a little help from the law. After all, there are two sides to every story and everyone does have a right to his day in court (in theory that works, sometimes the pain to get there isn't worth the effort.) Start by taking the remedies you can, including over areas where you have joint control but I would send a written notice, return receipt, with regard to what is going on so as to protect yourself as well. In addition, if you find that there are issues concerning customers, it may be within your purview as well. I am wondering whether he is offering services to customers for "cheap" by cutting out the partner...

 

[Arielmoon]

thanks for all your help. i appreciate every word and will take into considiration.

 

[Arielmoon]

im sorry to be such a pain. its just that my partner is not willing to work with me. like i said we have a corporation we both have 50 percent stock i am the president of the corporation, but since he has been stealing money i do not trust him with money, now we have a bank account and we each receievd a cc from the corp.. and hes is using his corp card for personal stuff when i had not yet received mine and making checks for materials for his side jobs that in fact he does do for cheaper by cutting of the middle man which would be the corp., our account is now overdrawn.. is there anything i can do to avoid him having acces to bank accounts/checks/cc's?? also he likes to tell everyone he is boss and only him tells me that i have to do as he says?? i just want out but he cant afford to pay me off plus i dont want to pay him, since i invested all this monney that he has spent and would leave me with alot of debts that have been unpaid for bc he used all our profits in himself on personal reasons??? what can i do?? please? help!!

 

[FlaRiptide]

It is obvious the partnership is not working. All his personal purchases would be treated as a loan to him from the Corporation on the company's books. Does the corporation own any assets unattached by debt? Does your partner's portion of the assets exceed the amount of his personal purchases so far?

I'd suggest retainning an attorney and prepare to dissolve the corporation. If your partner continues to spend, his personal expenses will exceed any equity thus placing you at personal risk. Having to declare a bankrupt business due to his misappropriations won't look good for you.