LLC bank account question

Discussion in 'Starting a Business' started by BAC, Apr 18, 2011.

  1. BAC

    BAC
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    Hello everyone,

    I am currently a 50% member in a LLC business. We only have 2 full time employees, and two more we use on occasion. There is no operation agreement, we have split everything 50/50 up till now. I found out my business partner, he has the other 50%, closed our business account wihtout my knowing. When I found out, he said he did it to save us money by moving it to a new bank. I did not think much of it at the time, he told me everything was set up at the bank for me to go sign and have my name added to the account.

    When I went to the bank, I was told they had no paper work for me to sign and they knew nothing about what my partner had told me. The bank also said my partner would have to sign to have my name added, or I would have to get a court order otherwise. The problem is I have no way of accessing the account, and now I find out my business partner is trying to dissolve the company, take the money and our clients...

    I have no money for a lawyer, literally none due to several surgeries over the past 3 months, so is there anything I can do myself? Petition the court to have my name added to the account? Or am I basically... up the creek without a paddle?
     
  2. Fergal

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    Welcome to Business Advice Forum BAC and I'm sorry to hear about your most unfortunate situation. I see that you are from Alabama, are there any free legal aid services there? What about services such as citizens advice?

    If you believe that your business partner is stealing from you and you cannot get professional legal advice you should probably contact your local police to see what they can do to help. You need to start making phone calls to see who can help and take any action you can to stop your partner before it is too late.

    You should also contact the bank where your original business account was. Find out as much info as you can from them regarding the account; when it was closed, under what authority it was closed, what the balance of it was, etc. Also investigate it to determine if your partner had the right to close it without your approval and signature.

    Are you still on speaking terms with your partner? What does he say about the situation?

    Good luck with it and please do keep us updated as to how everything is working out for you.
     
  3. BAC

    BAC
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    Yes, I have contacted 3 local free legal advice firms as well as 6 others, they all say that they do not give free service to business related matters.

    Since we do not have an operating agreement, we operate under the State of Alabama LLC statutes. I cannot find anything under those statutes that will help me as far as the bank accounts go.

    The last coversation I had with my business partner, he said what goes in the business is none of my concern, and he will no longer talk to me. It really is a shame, we have been very good friends for over 20 years.

    If I had the resources, I could have a lawyer file an injuction against him. I could prove mismanagement on his part and take full control of the company for myself.
     
  4. Fergal

    Fergal
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    It sounds like a very tough situation BAC. Have you considered contacting the police?

    Have you spoken to the bank where your original account was?
     
  5. BAC

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    I went to my the bank where the original account was, it turns out he did not close the account. Since both our names were on the account he could not close it, so 4 to 6 months ago he emptied the account and opened a new account at another bank. I had assumed he had closed the account, but the bank did it for him after no activity with a zero balance.

    I think I will call the DA tomorrow and see if there are any charges I could file, other than that I dont see where there is anything I can do to remedy this.
     
  6. Fergal

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    If someone is stealing from you, you shouldn't sit idly by and let them get away with it. There are things you can do, e.g. sending him a letter asking for redress, explaining that if he doesn't resolve the situation you will be contacting everyone involved (e.g. banks, clients, suppliers, etc.) to give your side of the story.

    I'd also spend time on the phone, contacting local business networks, business associations, chambers of commerce, government funded business support organisations, etc, etc, to ask if there is anything they can do to help or if they can point you in the direction of someone who can help.

    Good luck with the DA.
     

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