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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11567
Experience:  30 years as a practising solicitor.
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My buisisness partner has put cash drawing against my name

Customer Question

My buisisness partner has put cash drawing against my name for years.
When I objected stating that I hadn't had them I was told I couldn't prove I hadn't and she was only one that could amend it. Is this true?
Submitted: 1 year ago.
Category: Law
Expert:  JGM replied 1 year ago.
Thank you for your question.
This sounds fraudulent to me. As a partner you are entitled to refuse to approve the accounts where they are wrong. Your business partner also has the law wrong. It's not for you to prove that you didn't get the money, it's for her to prove that you did. Also as a partner you are entitled to know about and deal with the finances of the business so she is not the only person that can amend it; you have to take steps to wind up the partnership if this can't be resolved.
Please leave a positive response so that I am credited for my time.
JGM and other Law Specialists are ready to help you
Customer: replied 1 year ago.
Fantastic, do you do formal letters to accountants with these points.
if so I would be interested in arranging a time to call you to discuss.
Expert:  JGM replied 1 year ago.
No, JustAnswer experts simply answer questions. We are not allowed by the site to take cases on privately. You should use your own solicitor for that.
Customer: replied 1 year ago.
I have been going to lawyers and accountants for years. and not received the information you have given me after a few questions. I would just like to mention there is no formal partnership agreement, I don't know if this affects your advise?
So thank you. As these answers have I hope put an end to a very stressful saga. And will hopefully be able to re instate my capital as she as taken it all out and left me with no stake in salon.
Next question she has a buyer for the business. As there is no benefit to me selling. I believe I don't have to. but I am told that if I don't accept the offer I have to buy my partner out is this true?. which I am happy to do. Can you confirm if legally she has to give me first option and if I have to match the on the table.
I have been saying for years its fraudulent but to know avail.
When saying surely its illegal from tax (her claiming her drawings on mine) I am told no because we pay tax on profits not the drawings?
I had said
Expert:  JGM replied 1 year ago.
The absence of a partnership agreement would not affect my advice. You have what is called a partnership at will and it is governed by the Partnership Act 1890 which you can rad online.
If both of you can't agree on a sale of the business, or the terms for one to buy out the other, then the business would typically have to be wound up where there's only two partners. The effect of one partner leaving a two partner firm is normally dissolution. However, if the remaining partner wants to continue as a sole trader the outgoing partner would be entitled to payment of his or her capital account.
It is correct that tax is payable on profits and not drawings. However, it is fraudulent and indeed theft for one partner to take the drawings of another.
Customer: replied 1 year ago.
The drawings came to light in 2011. And at that time I needed to obtain a loan. the accountant said that I could sign my personal tax return and this would not affect me disputing the accounts. is this true?
and if there a time scale to how long one can go back? I have been fighting this for many years. letters from lawyer going back to 2011 and that was objecting to past 6 years of drawings. All lawyers letters were ignored.
I have just spoken to accountant, and he is still saying that she would have to agree to have my account being credited back?
I have drafed a letter asking him to remove all cash drawings until she can prove i have had them. Can he refuse to do this?
Expert:  JGM replied 1 year ago.
You can go back five years. After that the claim is time barred unless you serve court proceedings.
There is a disagreement so the accountant is in a difficult position. However you can object to the accounts and submit a tax return on the basis it can be changed later. You should not be using the same accountant for your personal tax return where the figures aren't correct, however.
I would say to the partnership accountant and your partner that if they don't solve this with you, you will be advising HMRC of the position and asking them to investigate your respective incomes. I oresume neither would want a tax investigation.
Customer: replied 1 year ago.
I wish someone had told me what you have 5 years ago.
I have just done that with my tax form.
why is it that I should use same accountant for my tax personal tax return?
would tax go back further than 5 years?
how does last 5 year compute in accountancy as tax falls a year behind
Expert:  JGM replied 1 year ago.
I am saying that you should NOT use the same accountant.
The five years relates to a claim against your partner so it would relate to all profits due to you but taken by her over the last five years because of her taking drawings from your account with the partnership.
Customer: replied 1 year ago.
Do I have any come back on my lawyer for not giving me these facts?
he just told me if she wouldn't answer nothing could be done other than shutting door on buissiness or going to court no other options were offered
Expert:  JGM replied 1 year ago.
Those options are valid and would be foremost in your solicitor's mind. Sometimes you have to think a little more creatively for people. That doesn't mean that your lawyer was negligent; perhaps just not quite as creative as she could have been.
Customer: replied 1 year ago.
If I took her too court. how does it work?
what chance have I got of winning?
I can prove I involved a lawyer to dispute.
Expert:  JGM replied 1 year ago.
You would need evidence that she took the money., not just that you made a challenge.
Customer: replied 1 year ago.
I have e-mails where the accountant said he took instruction from her to just split the cash.
would that have any bearings? Trouble is she then moved accounts and said I was to get no information.
Which he refused as she had contracted him. We are now at accountant who is ok.
Customer: replied 1 year ago.
So despite me rejecting the drawings in 2011. there is nothing I can do?
Customer: replied 1 year ago.
As she didn't object, would I then be able to have my own books made up reflecting the change in drawings?
Customer: replied 1 year ago.
The business originally had three partners . My mum sister self. my mum died leaving her share in business to my sister.
as my mum excluded all her children we put in a legal rights claim. We have yet to receive this. my sister reason for no doing so was because there was not profit in business. however the business has shown a profit over the three years should then not have paid it out? I believe there are two ways in which she claim on my mothers share, what are they?
who decides on which way?
Customer: replied 1 year ago.
Also should the accountant be allocating the share of capital over from my mum to my sister before legal rights have been deducted and paid.
Is there a time limit on receiving legal rights? I'm concern she is playing out for time s she did with the accounts
Customer: replied 1 year ago.
I am claiming legal rights for my late father, I was told it would be less as he had now passed.
Is this correct.?
Could you tell me what percent that is?
Expert:  JGM replied 1 year ago.
These later questions are largely a different topic and should be posted as a new question