Legal Question in Business Law in Washington

Re: Business Partner taking money

You've got a couple of problems going on at once here.

If the partner who wanted out is drawing money out of the company bank account, it appears that you did not go through the necessary formalities to get her out of the company and off the company bank account.

To answer your question directly, yes, you should be able to get that money back from her (unless she has already spent it and is otherwise indigent, or as we say, "judgment proof"). Just exactly how you go about that will depend on a lot of details not present in your email. (Did she do that while still officially a partner or after she had formally left? Is there a partnership agreement and if so, what does it say? Is your company in fact a partnership, as you say, or is it actually an LLC or a corporation?) No matter what the answers are to these questions, you have grounds to get the money back (and what she has done may also be criminal, depending on the details) but the approach will vary.

The other problem here is that it sounds as though your company is not following formal procedures, and that relaxed approach has cost you something. A former partner who has been bought out should not be able to access company funds.

When I answer questions on lawguru, I try not just repetitiously advise prople to go get an attorney. In your case, however, I urge you to do so. An attorney can sift through the details of your case and find the best approach for getting your money back. An attorney can also help you set up some procedures and also draft a buy-sell agreement, so that your business is better protected from this kind of problem in future. Nobody likes to spend money on an attorney, but your case is a classic example of why hiring an attorney at the formation stage of a company will help avoid greater cost later.

Hope this helps and good luck!