Business Partner Stealing Money: Everything You Need to Know
A business partner stealing money from the partnership's capital or revenue isn't unusual.3 min read
Updated July 13, 2020:
A business partner stealing money from the partnership's capital or revenue isn't unusual. However, doing so is criminal and absolutely unacceptable. Furthermore, money isn't the only thing that can be stolen by unscrupulous individuals in a partnership.
Can Your Stealing Business Partner Be Prosecuted?
Your business partner is the individual or corporate entity who has a legally binding stake of ownership or a business contract with you. Therefore, if your business partner is caught stealing from the partnership, they can be prosecuted. It's irrelevant whether the relationship in question is business-to-business, person-to-person, or person-to-business. If an entity illegally takes a company's assets for personal profit without authorization, it's theft.
Physical theft is when an entity takes item(s) or cash that belong(s) to the business without proper permission, to the disadvantage of the business.
Intellectual Property Theft
Intellectual property theft is the use of trade secrets and ideas without the owner's authorization.
Fraud is when a business partner takes money in the name of business endeavors but uses it for their personal purposes or for some other business. Fraud is a criminal and civil offense and can lead to imprisonment as well as claims for damages. In order to prove that your partner has committed fraud, you need to show that your partner deliberately lied and that you reasonably believed the lie and suffered damages as a result. However, if there's proof that your partner has a reputation for trustworthiness, the case could turn against you.
Embezzlement is committed when someone in an office of trust steals the assets of a company. This mostly happens when a partner can access the funds in a financial account.
Breaching a Fiduciary Duty
Fiduciary (or trustee-related) duty is breached when a trustee proves untrustworthy by misappropriating the funds in a trust. Illegally taking money from a business's account isn't within the scope of the fiduciary relationship could be considered a breach of duty. There must be evidence to prove a theft and show there were no mistakes or omissions in an accounting record.
Theft takes a certain pattern. Therefore, finding a certain pattern can serve partly as evidence. To prevent theft, you can use controls on your accounts and request detailed, authentic receipts for every expense.
You can also monitor ATM withdrawals on a company's debit or credit card. If you use a cash register, have a camera installed to record who removes money.
Get a Lawyer
Decide what kind of theft you're dealing with and decide whether to prosecute or not. Your lawyer can help with these decisions and help negotiate with your defaulting partner or his lawyer. You can also claim civil financial damages for a violation of a fiduciary contract and recovery of stolen goods and money from fraud, embezzlement, or physical theft.
In order to recover stolen funds, you might have to officially dissolve the company. Of course, embezzlement is also grounds to fire a thieving partner.
Never go it alone. Always get the help of a qualified lawyer. Handle these matters legally and with care so justice can be served without complications. Your lawyer can help to recover your claims for damages maximally and also effectively handle the case to achieve your goals.
The theft should be reported so that there is a record of how it occurred, how you discovered it, and what evidence you have to prove it. An investigation by law enforcement will then take place to determine a reasonable cause to follow up the case and validate the evidence.
The defaulter will be arrested and taken to court. After which the following steps will be taken:
- The allegation of stealing will be read to the defendant
- The defendant will enter a plea
- The hearing will be determined
- The defendant will either be detained or let go on bail, depending on the accusation and progress of the investigation.
Then, the case will proceed to trial. As the prosecuting party, you will have to provide evidence for the charges. The defendant is considered innocent until declared guilty by the court. Presented evidence will be verified to prove the defendant's guilt. The defendant will be sentenced if found guilty.
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