Partner pulled 5k out of account without letting me know.Many checks bounced. Is this legal? Also, had to scramble to make payroll.
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Partner pulled 5k out of account without letting me know.Many checks bounced. Is this legal? Also, had to scramble to make payroll.
Months back, partner in corporation put some capital in business account. Not sure how much. The other day he decided to take out 5k for himself saying that the company owed it to him and he wasn’t waiting for it any longer.By doing this many pre writen checks bounced and I was unable to pay other creditors that I had promised to pay. Our business is a corporation and me and my partner each own 50 percent.
Asked on June 30, 2009 under Business Law, Massachusetts
Answers:
J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
I am a lawyer in CT and practice in this area of the law. It sounds like your partner was not being very ethical or loyal to the company. Was the capital contribution to the company a loan with a note? It sounds like your partner put in money that he thought he would get back. Taking the money out of the company like that was wrong and hurt the company. I do not know what your policy is regarding taking out money from the business, but partners may do this without the other's notice unless it is specifically stated otherwise. I suggest that you re-evaluate who you are working with and make up some policies so this doesnt happen again.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.