There are many business disputes between members in an LLC or owners in a small business. When you become concerned about a business partner commingling or stealing many wheels are put into motion. The loss of trust between business owners can and will destroy your business. If you have concerns about how money or income is being handled you should trust your hunch and take prudent, well considered action. This does not mean a knee-jerk confrontation, it means calling the experienced business dispute attorneys at the Watkins Firm for a free consultation at 858-535-1511.
Why shouldn’t you just confront them about their commingling or theft? The first reason might be you don’t have enough facts to prove wrongdoing on the part of your business partner. If your fellow owner is commingling personal funds with the business and then taking money out of the business to pay that back it is an immediate red flag. Commingling of assets is the fastest way to destroy the protections of the corporate veil provided by your LLC or corporation. This will open you up personally to any liabilities, debts or lawsuits that arise against your company.
The second reason you shouldn’t confront them is it puts them on guard and your partner is likely to stop the very behavior we are trying to document, at least for a little while till they perceive the “heat” is off. We can help you to set up controls and to capture documentation that will prove what is or isn’t happening. Perhaps the other partner simply needs a bit of education about the risks of commingling and the proper way to handle expense reimbursement and owner capital accounts.
If theft is occurring, you shouldn’t have to be the one to confront them. Your business relationship is too important, and if they are in fact stealing you will want all of the leverage possible to negotiate the most advantageous solution. Our legal team will help you to organize the facts and we will confront your business partner or associate on your behalf. Theft is a criminal offense and usually in these situations we negotiate a swift reimbursement and and even faster exit from the company.
If you are concerned about a business partner commingling or stealing contact the Watkins Firm or call us for a free consultation at 858-535-1511. Each situation is unique, and we can provide sound counsel on the best options to document what is happening and resolve the questions in your mind. Your business deserves careful consideration.