Legal Question in Business Law in Tennessee
I am 1 of 5 business partners in a marketing firm set up as an LLC in Tennessee. I just found out, with proof in writing, that 2 of the partners have engaged in external agreements with customers in return for services offered by the partnership-based company. For example, they offered our services to a customer in return for a financial kick-back above and beyond what the customer would pay the company. They have set this up to receive additional payment from our customers beyond what the customer has agreed to pay the company.
Is this illegal?
Does this violate our partnership agreement?
Have they committed a crime?
Have they violated any SEC regulations/laws?
1 Answer from Attorneys
First, the SEC really doesn't have anything to do with partnerships. However, the other partners have most likely violated the partnership agreement. There are a number of ways to go about handling this, but the non-involved partners need to sit down with an attorney and the partnership agreement and figure out what their options are.
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