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  4.  | Will a partner’s theft lead to business litigation?

Will a partner’s theft lead to business litigation?

| Dec 10, 2020 | Business Law

Working with a business partner means sharing the responsibilities for many aspects of the venture. Florida partners build mutual trust with the help of a solid partnership contract that outlines the division or labor and profits as well as the expectations and goals they have for each other. When one partner breaches that contract and that trust by committing fraud, the other partner may have to weigh his or her options for business litigation.

Fraud that brings financial loss to a business often means a significant setback for the success of the venture. In addition to the loss of the embezzled funds, it is often difficult to rebuild the trust of clients when a business partner steals from the company. Loss of client trust can lead to loss of profits and other damages to the partner, perhaps even including the end of the business altogether.

Criminal or civil matter

Theft by fraud is a crime, and a business owner may decide to press charges against the partner who steals. However, a criminal conviction will not always adequately address the damages to the business. A civil case will require the business owner to prove that the partner’s actions were fraudulent and that they resulted in measurable damages. The owner will also have to demonstrate that he or she was unaware of the partner’s illegal activity.

Deciding whether to press charges, file a lawsuit or both may require some soul-searching and some sound legal advice. Proving that the partner’s actions went beyond the scope of his or her rights as a partner may depend on the thoroughness of the partnership contract and other factors. Seeking answers from a Florida attorney with experience handling business litigation will be an important first step.

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