Starting a business is a stressful venture but the financial rewards entice people to start businesses annually. The process of starting a business is usually far easier if you have a partner to split the responsibilities with. Finding the right partner is the challenge as some want the rewards without the work while others will go to any lengths to maximize profitability. Going to any length is great as long as it stays within the letter of the law. Once illegal business practices are enforced with your knowledge, you can be held accountable as well. The following are tips to dealing with a business partner that has started to cut corners and is doing business illegally.
Hiring a Federal Lawyer
A state lawyer might not have the expertise or experience that a federal lawyer does. States differ in their laws with federal laws reigning supreme in federal cases. The federal authorities might be called in if the business operates in multiple states or internationally. The lawyer will allow you to gather the proof that you need about the illegal activity. The easiest way to have all proof erased is by showing up with an attorney or by obviously asking for access to a certain account. You do not want to be caught up in any type of fraud or embezzlement that could be occurring behind the scenes. The peace of mind that the attorney will provide is worth the investment and your freedom.
Confront with Documentation
The most uncomfortable aspect is going to be confronting the illegal activity. If this can be remedied then it should be as quickly as possible. A partner might deny the allegations against them so providing documentation is imperative. Allow them to explain themselves as it could be a misunderstanding of the laws. The odds are that if your partner kept their dealings a secret then they knew what they were doing was wrong. If they are unwilling to speak with you, then you should allow your legal team to handle all communication.
Dissolving the Partnership
Dissolving the partnership could be a very tough process if all agreements are not put into contracts. The partner could decide to pull their money out which could cripple the business. Most investors will want to earn a return or at least recover their initial investment so a spiteful desertion is unlikely. Business lawyers will handle the details like who is responsible for rent on the lease or other outstanding bills. There is also a chance you are offered a settlement for your silence to help maintain the image of your partner.
A business partner jumping off of the deep end is not unheard of. You do not want your dreams, money, and reputation to be damaged through your relationship with this individual. As uncomfortable as this situation might be it is imperative to keep your cool and document everything. The last thing you want is to play the part of a scapegoat when the federal authorities come knocking.