Legal Question in Business Law in Maryland

Business Ownership Disception

Ok here is the situation, I went into a business deal with the goal of being part owner of a barbershop. Prior to me investing any money, I wanted to know the financil background of the business. Although the bisness was in the rears for three months, I still decided to become part owner. I paid $25,000 as the initial investment. Shortly after I gave the money, the owner had a change of plans, he no longer wanted me as an co-owner. He change the locks, prevented me access from the accounting books.

Do I have a legal leg to stand on to get my money back? After I asked for my money back, his argument is that I gave him the money as an investment to do whatever he wanted to do with the money. Not the case at all. I put that money towards the business that I had interest and part ownership in.

Because I am not as business savvey as he, I feel as though he toke advantage of me, and stole my money. He lead me on for the first three week. He order my business cards with the title of Co-Business Owner, I had the management keys to the office, and the shop.

I just want my money back...what do I need to do ...how do I fight this in court.


Asked on 6/09/06, 5:22 pm

2 Answers from Attorneys
Alton Drew Alton Drew, LLC

Re: Business Ownership Disception

How your problem is addressed will depend on a number of factors. First, how was this business organized. Did you buy shares in a corporation? Did you become a partner in a partnership? Did you become a member of a limited liability company? Another factor you have to look at is the agreement you had with your fellow business partner. If you were general partners, he can't just dissolve the partnership on his own. An accounting must be given before winding down the business. If you bought shares in a corporation, you should be able to determine your share of any equity based on the proportion of shares that you own. As a partner you have a right to see the financials. Under either entity, you can file a lawsuit against your partner.

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Answered on 6/10/06, 10:53 pm
Nick Sloan

Re: Business Ownership Disception

Depending on your ability to prove what you say, you may have a good cause of action to bring suit to recover your funds. Without knowing more it is difficult to say what the cause of action would be, but breach of contract comes to mind.

I would consult the State's Attorney to see if there is a criminal action.

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Answered on 6/09/06, 7:36 pm


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