If my business partner and I agreed that we will get paid evenly out of our business but he’s breached that agreement, what can I do?
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If my business partner and I agreed that we will get paid evenly out of our business but he’s breached that agreement, what can I do?
Recently I noticed that he has been paying himself and his wife considerably more without my consent. Before this he was cutting my pay because he told me the company does not have money. So now he can get paid more? We are 50/50 and my name is on all the personal guarantees. What should I do, is this legal?
Asked on December 1, 2015 under Business Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
If there was a written document (e.g. a partnership agreement) setting out the terms of the agreement, then if he has breached it, you could bring an action for breach of contract to enorce the agreement and force him to return monies taken in violation of it.
Also, partners have a "fiduciary" relationship to each other: an obligation, imposed by law, to act honestly and faithfully in regards to each other (and to also exercise as much care with the other's money as they would with their own). You could also bring an action for breach of fiduciary duty, seeking a court order requiring him to account for funds, etc. he's taken or paid to his wife and to again amounts in excess of what he should have taken.
If you uncover evidence that he did in fact steal or embezzle, you could sue him for theft as well, in addition to fililng charges.
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