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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 30929
Experience:  Over 5 years in practice
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I have a partnership with my uncle ,we have 17 houses that

Customer Question

I have a partnership with my uncle ,we have 17 houses that we rent out . Unfortunately he had an accident 5 years ago that rendered him unable to work. His daughter assumed power of attorney over his affairs and as I had already moved to Spain , she controls the business. All seemed to be going well , until I noticed the company started to lose profit. When I looked at our online bank statements , I noticed that for the last 40 months a payment to "Marbles" with a 16 digit ref number was being made. These payments were all for round numbers , usually for 500 , and sometimes for 1000. I think she is paying a personal credit card as we don't have a company credit card. After examining the statements closer , I noted that 7000 has also been withdrawn from various cash points , in the last 12 months alone.After consulting her activities through Facebook , I noticed that most withdrawals corresponded with family birthdays, holidays, christenings, spa weekends etc. I contacted the bank who are issuing me with log in numbers for our account so I can look back for the full 5 years.I have contacted the Police and are waiting for them to call back. My uncle believes she is doing a good job and sees no wrong in her, fortunately we signed a declaration of trust some years previous to his accident. I would like to get her out of her position with our company and control it my self. I know the police action will take some time and need to confront my uncle and his daughter asap to prevent further loss. She earns a modest 12,000 from our company , her partner works in a car factory and I'm guessing his salary would be around 25,000 . They have four children , enjoy a minimum two holidays a year, and live a very extravagant lifestyle , which is impossible on their earnings.How do I get her out of my company and which is the best course of action ? What is the probable outcome from any Police investigation
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Is this solely a partnership? It is not I presume a limited company?

Who's legal name are the properties in? Are you and your uncle joint owners?

Kind regards

AJ
Customer: replied 2 years ago.

Hi AJ , Yes this is a partnership , we used to be a limited company , but Laura , the woman in question , forgot to register our accounts with companies house a few years ago , this led to the company being dissolved and thus we reverted to a partnership. Of the 17 property's 2 are owned outright , 9 are in my name, 4 are in my uncles name. The other two are my personal apartments and not connected to the business

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

My apologies when you say two are owned outright - do you mean they are jointly owned by you and your uncle.

The two properties not connected to the business - is the rent from those paid into the business?

Kind regards

AJ
Customer: replied 2 years ago.

The two that are owned outright were two property's that we built with our company funds on land owned by myself and my uncle , they have no debt attached to them. So yes they are jointly owned . The two property's that are my own , are totally separate from the business and rents are paid to me only

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I will write a response with some options. This may take me some time so please do not be concerned if you do not hear from me until later today.

Can you confirm, is there any possibility that your uncle will re enter the business?

Do you have a partnership deed?

Kind regards

AJ
Customer: replied 2 years ago.

My uncle is under a ward of court , he is now receiving monthly compensation and is unable to work. He has a brain injury and is not capable of re-entering the business. As far as I'm aware we don't have a partnership deed , just a straightforward partnership. We do have a signed declaration of trust.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Does the declaration of trust just says you own the properties as tenants in common 50/50?

Kind regards

AJ
Customer: replied 2 years ago.

I'm not too sure , its with the solicitor who set it up . He insisted we drew it up 7 years ago , saying it would ensure the other partner was in full control if anything should happen to any of us.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Do you have a copy of the deed of trust?

Kind regards

AJ
Customer: replied 2 years ago.

I requested it on Monday , they said they will email a copy when they can locate it

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I will respond as far as I can and we can address the declaration of trust when you receive it.

Thank you

Kind regards

AJ
Customer: replied 2 years ago.

O.K thank you, I have to go now, will your reply reach my e.mail ?

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I think you will be notified once I have replied.

I will be around for most of the weekend to deal with any follow up queries as well.

Kind regards

AJ
Customer: replied 2 years ago.
Are you going to reply today ?
Expert:  Alex J. replied 2 years ago.
Hi

Thank you.

My apologies I have been in meetings all afternoon.

I am just researching the answer now I am back at my computer!

Kind regards

AJ
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

The first point you have to consider is that the most likely resolution from this is a full dissolution of the partnership and each party goes their separate ways. If you cannot trust your partner (or your partners representative) you cannot carry on in an unlimited partnership with them where they have the power to bind and run up liabilities in your name.

Baring this in mind if you cannot approach your uncle to change his representative what do you want to seek to do? Do you want to take control of the business?

Have you taken any practical steps for example asked the bank to freeze your partnership accounts?

Kind regards

AJ

Customer: replied 2 years ago.
I am flying in to England on Thursday , I was going to my uncle and show him what I have found out. When he sees what she has done , I think he will be happy for me to take control . I would prefer to sack her and run the business as it is myself . I would like advice as to the best way to approach this legally . I haven't frozen the accounts yet as there are a lot of mortgage payments made from the account, and I don't want to ruin our credit rating . At the moment she has no idea that I am on to her . I need advice as to the best steps to take next .
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

The best way to deal with this would be to do the following:
1. Make the police report - which you have done;
2. Get your uncle to revoke the power of attorney in relation to the partnership and sign it over to you - whether he has the capacity to do this will depend on whether his doctor agrees that he does;
3. Get a copy of the deed of trust - that will at least give you an idea as to what your capital share in the partnership is - if it confirms it is 50/50 you can use this as evidence of her theft;
4. Contact the bank and tell them that the banking mandate has been breached or otherwise request that they at least freeze any debit cards so no more cash withdrawals can be made;
5. Have you notified your uncles daughter and told her you want to take over management of the partnership's financial affairs?

Kind regards

AJ
Customer: replied 2 years ago.
Yes , I can confirm that we are a 50/50 partnership and that I have contacted the police . So basically , I can go to my uncle with my evidence , sack his daughter and take full control of the business , confiscate the card and block her from gaining Internet access to the account immediately . Then wait for the police action to run it's course , and legally I am within my rights to do so ?
If my uncle refuses this course of action , I need to dissolve the partnership and split the assets between both parties.
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

What you need to do is see if your uncle will be agreeable to giving you a power of attorney in respect of his control over the partnership assets and affairs. Effectively withdrawing this from his daughter. Ideally you should also sign a partnership deed to deal with future administration of the partnership. In order to do any of this you will need to discuss with your uncle and his doctor (if he consents) to confirm whether he has capacity to sign any new documents.

Essentially the daughter has defrauded you. You do not want to put anything in writing that will prejudice you, as a starting point ask the daughter to allow you to take control of the company. Also you must contact your bank as a matter of urgency to ensure that they assist you in preventing any further unlawful removal of monies from the account.

Bare in mind if you have to dissolve the company the assets will have to be split so in all likelihood they will have to be sold. Are the properties all in positive equity?

Kind regards

AJ
Customer: replied 2 years ago.

Yes all the property's are in positive equity. As I recall , our declaration of trust was designed for exactly this kind of situation , I'm pretty sure it gives control of the company to the other partner in these circumstances. Which I'm hoping gives me the legal right to take control of the business and manage it as I see fit.

Expert:  Alex J. replied 2 years ago.
Hi

Thank you.

The declaration of trust is crucial, potentially it could have the same effect as a partnership deed.

Can you let me know once you have obtained a copy and let me know the details?

Kind regards

AJ

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