What is the exact definition of embezzlement?
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What is the exact definition of embezzlement?
If my business partner is paying back a personal loan with company funds, can this be construed as misappropriation of funds?
Asked on May 28, 2014 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
If there was no agreement or other authorization allowing him to do (like a corporate resolution), then it may well be embezzlement, which in California is unlawfully taking something from another that has been entrusted to you (see e.g. Penal Code 503)--i.e. taking money from the company, which has been entrusted to his control. It may also be a violation of his fiduciary duty, as a partner, to his partners (i.e. you). You should consult with an attorney in detail about your options, which include reporting this to the police and/or filing a civil lawsuit against him.
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Embezzlement is theft or misappropriation of funds placed in one's trust or belonging to one's employer. Embezzlement is a crime, typically a felony. Based upon what you have written, your business partner's paying back a personal loan with company funds if he has no permission to do so from you is a crime, misappropriation of assets of embezzlement. I suggest that you consult with law enforcement as well as a business attorney in your locality. One can be found on attorneypages.com.
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