Forums: Discussions for entrepreneurs and small business.

We are part owners in a small business. My husband owns 33% of the business and is the vice pres. His partner the president and CEO of the company runs all of the money end of the business. My husband is always out in the field doing the labor. He never finds out what kind of deals his partner is making until after the fact. My husband isn`t even on the checking account for the business. If his partner makes bad money decisions, borrows money from people and writes checks for money that isn`t even in the companies account and does this all without my husbands knowledge is my husband responsible for this even though he doesn`t know about it?  We want to just leave the business, but we feel that we are stuck.  His name is on the building rental for our business. If we file bancruptcy are we stuck with the money we owe for the building? The rent is late alot.  Do we have any rights?  We have the problem of not having enough money to pay payroll for the employees, pay the taxes, pay the owners,pay the rent. If we don`t pay our employees everyone will leave so sometimes they pay the employees to keep them and don`t pay the bills. Again my husband has no part in that part of the business. He basically is like an employee but on paper he is an owner. He never hears about what his partner is doing until after the fact.

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I believe it is set up as an s-corp. His name is on the paperwork as part of the person leasing the building. Him and his main partner are leasing the building for the business from another person. We have three other partners but they don`t own as much of the business. My husband and the other partner who is the president are the main shareholders of the business. The other partners are not on the lease agreement. My husband`s name is not on any of the work vehicles, or the checking account. His business partner will borrow money from people and promise to pay them back. But that doesn`t always happen due to lack of funds. My husband and the other partners are never informed of these transactions until after the fact.They have never been involved in deciding to do this.

Sounds like the majority owner should be on his own, since he won`t inform anyone of anything .... pretty reckless behavior .... I would suggest going over the original partnership contract and reviewing it to see what actions or responsibilities are being violated, if any .... if it was me, I`d be looking for a way out.


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M Hall
Website Critique Community
International Society of Curmudgeons

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It took me about four different bands, but I learned the hard way that whomever controls the money, controls the company. If you really want equality in a company, then there must be mutual responsibility in managing and controlling the cash. Otherwise, it`ll fail pretty much every time.

I`d think that talking with an attorney would help you with a way to either reconfigure the business, or leave without any further financial obligation or liability.

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