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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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My business partner is refusing access to my business

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My business partner is refusing access to my business accounts.
I am aware it is in breach of partnership act and have been told my only options is to go to court and close the business is this true?
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Do you want to carry on in business with this person? Kind regards AJ
Customer: replied 2 years ago.
Not with her, however I don't want the business to close. I am willing to buy her out. because she has put me in deficit in capital.
it would mean paying full amount which for obvious reasons I don't deem fair.
Someone had said I could sue her? But when I approached my lawyer he said only other option was to take her to court and wrap business up.
Hi, Thank you. If you sue her, that is pretty much the end of the business as you cannot carry on business together. The lawyer I am afraid is correct, if you took this to court, the court would likely remedy the situation by ordering the dissolution of the company. Can you tell me a bit about the company assets that you would acquire? Is it a trading name, good will, customer list, plant machinery etc? Why has she stopped access? Do you suspect she is fiddling the numbers?
Customer: replied 2 years ago.
There is some is some machinery furniture, name and good will in company. And a big existing clientele.
She is more than definitely putting cash drawings against my name.
Customer: replied 2 years ago.
that I have not received.
Hi, Thank you - I think the best thing to do is freeze the company bank account - have you contacted the bank and told them to put a stop on any further drawings? Also who has the relationship with the big clientele? Could you take these clients to a new entity?
Customer: replied 2 years ago.
As she as diminished my capital with inflated drawings on paper I now have nothing.
It has been taken in cash so there is no paper trail. Yes clients could be moved.
freezing the bank account is no good, depremential to me as I am still liable for clients staff and the bills.
Hi, Thank you. If that is the case you have to either take drastic steps to dissolve the business and stop her incurring any liability in your name or make the offer the purchase her share. Essentially what she is doing is fraud - is there any reason she has started doing this? If she is withdrawing cash in your name, you should also consider making a police complaint. Can you get the bank to confirm when she is making cash drawings?
Customer: replied 2 years ago.
I have tried everything over the years. Police are not interested. She has not been banking the cash. takes it in cash.
Only shows a certain amount through bank and declares that. I keep saying this is fraud. outwith closing the business down it wold appear there is nothing can be done. I have suffered many near nervous breakdowns with this situation.
Told that its her word against mine. however I can prove that there where solid cases in past where there was obvious misdemeanours as she was claiming things that were obviously in her name against mine. as she did the paperwork side in business. I discovered it when I applied for a loan for another business. the bank manager called me to say he was concerned that my capital in business was almost none existent. the only accounts that were presented to me showed only share of capital and equal distribution of profits. when I demanded it was all put back. She lifted the accounts and put them to another accountant who refused me information saying he was contradicted by her. I am aware both of them were in breach of partnerships law and can refuse to accept accounts I have not seen. I had no way of obtain any info as she kept office in her home despite lawyers letter asking her not too and to account for cash she choose to ignore him. she also had the bank details and cards sent to her home. the bank in view of situation demanded two signatorys. his meant I couldn't change the address as she refused to sign to change it. eventually the bank froze account until she did so. that has only been in past 18 months. I am too dependant on my income from it so did not want to go down road of closing down.
Hi, Thank you. I am sorry to deliver bad news but if she wont negotiate or co operate then your only option is to force the situation. When you apply to court you could ask the court for order that she sells you her share of the business at a price set by an independent valuer - but it would be up to the court to order this remedy. If you proposed to her that the business be dissolved would she accept this?
Customer: replied 2 years ago.
I believe she doesn't have a choice when it goes to court. I have enough evidence with the various situations to prove that it is impossible to work with her.
I had wanted to know how I would go about suing her for fraud?
Hi, Thank you. You can include fraud in your claim to dissolve the partnership for breach of the partnership act. I would bare in mind that fraud is incredibly hard to prove - I would focus your energy into proving the other claims - i.e breach of duties under the partnership act.
Customer: replied 2 years ago.
I can prove that but how does that benefit me?
Are the courts more likely to let me carry on the business?
Customer: replied 2 years ago.
What happens if I refuse to sign accounts returns on basis of fraud?
what happens then
Hi, Thank you. Do you need to sign the accounts to file a tax return? If you refuse to sign the accounts, then this may force her to negotiate with you.You can ask the court as a remedy to carry on the business - but it will be up to the court to decide if this is a suitable remedy.
Customer: replied 2 years ago.
At present I have. filed but pending confirmation of things.
Hi, Thank you. If they are asking you to sign the accounts have they presented you with the information that shows how the accounts were prepared? I.e the business info? Without having seen this I think you can reasonable refuse to sign the accounts.
Customer: replied 2 years ago.
What if I just refused to file these tax returns?
Hi, Thank you. If they wont give the information to show how the returns were calculated, I do not think you can, acting as a responsible partner, sign the returns. You need to know that the information you are filing is accurate, without knowing this you will be potentially misleading the HMRC. This in my mind is sufficient grounds to object.
Alex J. and other Law Specialists are ready to help you
Customer: replied 2 years ago.
I was going on advise of my accountant. he said he would put that it was being queried but did the return.
I did refuse to sign it because I was concerned that by doing so it would commit me to these accounts.
this is why I employ an accountant to keep me right legally.
what do I do now ? will I phone tax office. And explain situation.
Thank you.
Can you confirm is this your personal tax return or the return for the partnership?
Kind regards
Customer: replied 2 years ago.
My personal. But another accountant told me it's still the same thing. Stating profits that you have received. And of course I haven't.
Customer: replied 2 years ago.
Can you confirm if the accountant has put my personal tax returns in is that stating me profit is that me acknowledging that I have received it?
Hi, Thank you. That is correct if you file a tax return stating that you have received profits that you have not, then this is an incorrect tax return.
Customer: replied 2 years ago.
So, can I ask my accountants to withdraw this on basis that he mis informed me of legalities
I would ask your accountant to amend the return so that it reflects what you have actually received. Kind regards AJ