Entering into a business partnership with another party can be a very exciting experience. If everything goes to plan, you can pool your resources, grow your portfolio, broaden your market reach and create wealth.
But, like in any relationship, it is not uncommon for differences to develop during the course of a business partnership. What if those differences are rooted in mistrust? Specifically, what if your business partner is dishonest?
Ways partners steal from their businesses
When you enter into a partnership, all assets and liabilities covered by the partnership belong to the business and generally cannot be utilized by one party without the knowledge or approval of all the partners. With that said, here are common ways partners steal from a partnership:
- Embezzlement of business funds
- Theft of intellectual property
- Cash larceny
- Exaggerated reimbursement
How can you know whether your partner is stealing from the business?
If you suspect that a partner is stealing from the business, you’ll need to take appropriate steps to address the matter. However, you cannot act on mere speculation. You’ll need evidence. Here are two signs your partner could be stealing from the business:
They are denying you access to business information – This is a clear red light. If you are in partnership with someone, you deserve to access relevant business information like profits and losses, inventory and other pertinent information. If your partner is blocking you from this information, then you need to ask questions.
A sudden increase in personal expenses – Every business has its share of expenses. But if your partner is billing the business questionable expenses, or if they are not reporting expenses, then there may be a problem. Your partner could be diverting funds.
Safeguarding your interests
No matter the nature of your business, every partnership is unique. Seeking legal guidance to learn more about New Jersey partnership laws can help you safeguard your rights and interests if you suspect that your partner is being actively dishonest.