Legal Question in Business Law in Missouri

I am one of two partners in an LLC that owns a property management company. I am a real estate agent and my license is responsible for the LLC per MO Real Estate Commission. Have been in biz 3 yrs. My partner runs biz and responsible for all bookkeeping. Has never indicated any problems with handling bookkeeping duties. Recently audited by Real Estate Comm which found our checking acct was $40000 short. Most appears to be accounting errors - not handling sec deposits correctly, paying owners for checks that went bad, owners owe us money, etc. I was shocked. And then found out she has $13000 in her house from when we first started because she could not figure out how to handle the returned checks in the computer. Some of this money is money orders which are no good. Biz has dwindled greatly over last year and 5 owners this week say they left because she did not return calls, emails, mail checks to them on time. I am personally on the hook for $45000 that I can not afford to lose. I do not want to be responsible for replacing any of the money orders that I had no idea were at her house, any of $40000, the cost of accountant we have hired to repairs books, etc. $20000 of my $45000 is money I owe to former owner. I also want to sue her neglect of company which has destroyed asset. I am concerned about losing my real estate license. It is how I provide for my children and self.


Asked on 10/21/09, 8:49 pm

1 Answer from Attorneys
Sean Santoro Santoro Law Office

I assume you have a partnership agreement in effect. Assuming it comports with legal requirements, the general rule is that partners are jointly liable for the debts of the partnership. If one partner has been negligent in a business duty where they are charged with exercising diligence, they can be sued by the other partners for contribution. A key component in these suits is whether the negligent partner has any assets to satisfy a judgment, and whether the negligent partner can seek bankruptcy protection.

The partnership agreement governs, to a large degree, the rights and responsibilities of the partners. If you have additional information regarding the agreement, or want me to review it, feel free to email me at [email protected] or call me at 913 441 5025 to discuss the options.

Sean Santoro

Santoro Law Office

Licensed in Kansas and Missouri

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Answered on 11/02/09, 3:53 pm


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