Legal Question in Business Law in Washington

Breach of Contract vs Corp Theft

I went into a partnership with someone where we had an agreement to incorporate within 6 months and divide profits 50/50 at end of year. My partner originally had control over the Bank acct and was using money for personal use. Therefore, I pushed the Incorporation (SCorp).

2 weeks after the paper work was completed and a Corp Bank acct was established my partner transferred all of the funds Apx 150,000.00 plus stole all of the business assets that I had contributed. In 6 months I only received 2000.00 in compensation. In addition the taxes were not paid for employees. I started to pursue a lawsuit but after spending $3000.00+ and only getting a letter sent asking for the return of the equipment which I eventually went and forcefully removed from a second office that he had opened. I do not have the money to pursue a lawsuit. I am considering representing myself and filing a civil lawsuit. However, I believe a lawyer must represent a corp. I am in the position of being liable for this persons debt, unable to disolve the corp - money owed. Is it possible to sue for breach of contract? Should I try to get charges for Corp Theft?

Please - any ideas on how to get out of this mess will be greatly appreciated!


Asked on 9/02/07, 1:19 am

1 Answer from Attorneys
Susan Beecher Susan L. Beecher, Atty at Law

Re: Breach of Contract vs Corp Theft

$3000 for one letter does not seem quite right. This attorney may have done several other things and simply did a bad job of keeping you informed. However, if he or she really only wrote one letter for $3000, something is wrong there.

It is true that a corporation must be represented by an attorney. This is because a corporation is considered a person under the law and one cannot represent another person in court unless one is an attorney.

You have plenty of legal grounds, if all of the facts that you have given here are correct, to pursue several claims against your former partner/co-shareholder. I would encourage you to do some checking and find another attorney who can pursue this a bit more cost effectively.

You do have some legal claims you can make on your own behalf, and those do not require a attorney, but can be legally filed by you, acting unrepresented. However, given that you should act quickly (see below), and would not really have time to acquaint yourself with all the specifics involved, I still urge you to seek legal counsel for this.

Whatever you do, I urge you to act quickly. The longer you wait, the more opportunity your partner will have to waste (use up) the funds or to hide them.

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Answered on 9/02/07, 11:26 am


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