If I am manager and 5% owner of a restaurant and the majority owner is using restaurant funds for personal expenses, what actions can I take?
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If I am manager and 5% owner of a restaurant and the majority owner is using restaurant funds for personal expenses, what actions can I take?
Asked on December 27, 2011 under Business Law, Texas
Answers:
Kenneth Avila / Kenneth Avila, Patent Attorney
Answered 12 years ago | Contributor
All owners of a business owe their business certain duties such as duty of due care and loyalty. Duty of Due Care states that an owner must “discharge their duties to the business with the same degree of diligence, care, and skill which the ordinary prudent person would exercise in the management of his own affairs”. Duty of Loyalty states that “in all of their dealings with the business owners must promote the interests of the business without regard for personal gain”. From just your facts it seems as if the majority owner is breaching both of these duties. However I would advise you to look carefully at agreements between the business and the majority owner to make sure that he is indeed taking money from the business that is not rightfully his and that you carefully and fully discuss this with an attorney.
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