What to do if we just found out that my wife is 50% owner of a company that her mother started 4 years ago and she’s been signing my wife’s name to open credit lines?

My mother-in-law has opened credit lines and increased limits for the company without my wife’s consent. It has also come to our attention that this company has not been paying the county taxes for a couple of years. This is starting to affect our personal lives. Isn’t my mother in law doing something illegal by signing for my wife and opening these new lines of credit without her permission? and what can we do?

Asked on August 1, 2014 under Business Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Yes, your mother is committing one or more crimes--e.g. identify theft (signing as if your wife), tax evasion, possibly embezzlement or theft if she's taking money for herself--and is also committing torts, or acts she could be sued for, such as identify theft, breach of fiduciary duty (the duty each partner in a business owes to other partners), etc. You should speak with an experienced business law/litigation attorney immediately, to discuss both what you can do and how to minimize your wife's and your exposure; this will probably include, among other things, reporting your mother-in-law to the authorties for her illegal acts, but first get legal advice before acting.

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