Two heads are better than one. Nowhere is this adage true than in a business partnership. When you get it right, the right partnership can take your business to greater heights, make profits and bring your dream to fruition.
Learning that the partner you trusted with your investment and livelihood is dishonest, on the other hand, can be devastating, to say the least. The betrayal can leave you shocked, sad and dumbfounded. Unfortunately, it is not uncommon for a partner to steal from the business.
Ways a partner can steal from the business
The court will take a number of things into account when determining theft. Here are common ways partners steal from the partnership:
- Theft of intellectual property
- Theft of physical assets
- Embezzlement
- Fraud
- Breach of fiduciary duty
So what do you do if you learn that your partner is stealing from the business?
First, you’ll need to establish the nature of the theft as well as the extent of damage your partner’s action has caused the business. Whereas any form of theft is detestable, all thefts are not created equal. For instance, carrying the company’s pens home may not have the same impact as fraud.
Next, you need to refer to your partnership agreement. If you have a clause on conflict resolution, then this would be the perfect time to review it to decide on your next cause of action.
Here are three options you can consider depending on the nature of the theft:
- Fine the partner – if the theft is minor, you may fine the responsible partner, put the matter behind you and continue with the partnership
- Expel the partner – Repeat incidents of dishonesty may necessitate the removal of the partner in question from the partnership
- Dissolve the partnership – If the resulting damages from the partner’s action are irreparable, you may have no option but to dissolve the partnership.
Protecting your rights and interests
A business partnership comes with its share of risks. One of these is the risk of partnering with a dishonest person. Find out how you can protect your rights and interests when dealing with a partner who is stealing from the business.
