What constitutes embezzlement by an owner holding 50% interest in a business?
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What constitutes embezzlement by an owner holding 50% interest in a business?
What would potential consequences be? Say, one owner took funds from daily deposits to compensate themselves but did not disclose this information from their partner. This information was readily available to the other partner. Also, what right does one owner have to create a new business identity, take all of the assets of the previous but active business,and use them as assets to their new business? Is this even legal or is this actually embezzlement?
Asked on December 29, 2012 under Business Law, Colorado
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Based upon the facts that you have written, a criminal and civil wrong has occurred be it embezzlement or theft. Embezzlement ordinarily happens when an employee of a company or someone affiliated with it improperly takes money from the company. Likewise, the taking of assets from one company to start another without the approval of other owners of the entity is a civil wrong.
Based upon what you have written, I suggest that you consult with a business attorney to investigate the situation further and evaluate whether a criminal or civil act has happened.
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