There are three equal partners in the business. In addition to the missing cash the one owner also misused money to pay for Personal expenses. What options do the other two owners have? What is the best way to proceed when it come to asking the one owner to give up their shares and walk away?
I recommend that your first and immediate course of action is to report this to the Denver Police Department for investigation. A lawyer cannot threaten criminal prosecution to gain advantage in a civil matter, so I cannot and do not recommend that you do that.
You can hire a litigation attorney to file or threaten to file a civil action to recover the embezzled funds. It is then possible that the matter could be settled by the course you suggest of the person giving up their shares in the settlement.
This response contains general information only and is not legal advice on which you may rely. It does not establish an attorney-client relationship.
So is this a partnership, a corporation, or LLC? Do you have a written partnership, shareholders, or operating agreement? Does that provide dispute resolution terms and buyout provisions?
As is almost always unfortunately the case, I assume that you do not have a written agreement. If so, then your primary option is to plan to file suit against this "partner" if you cannot come to a mutual agreement. Please hire an attorney to draft the withdrawal and settlement agreement or you will make various tax and legal mistakes that will be much more than retaining an attorney now.
This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.
It really depends on what your agreement says. If you have an agreement it will almost always refer to recourse in the event that one partner or member breaches his fiduciary duty to the company. Generally, you cannot kick the member out, but you can find him liable for the damages and lien his membership interest if he does not reimburse the company.
It is possible that this is criminal as well if he took the money with no intent to return it. If there is no agreement, there is still recourse to the statutes, which statute depends on the type of entity, as the statutes provide default rules for business entities. For example, under the default provisions of the LLC Act, the members by majority vote can remove a manager. You also could dissolve the company and form a new company without him. You should call a lawyer - many offer a free 30 minute initial consultation, including me, where you can give the all the facts and get a specific response to your questions. Hope this helps.
You can reach Dave Rich at (303) 886-2516 or [email protected] Dave Rich is an attorney licensed in Colorado. Answering your questions does not create an attorney-client relationship between us. You should speak with an attorney to whom you have provided all the facts in your case, before you take steps that may impact your legal rights. I am not obligated to answer subsequent emails or phone calls unless you have hired me. I wish you the best of luck with your situation.
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