Computer System 1

What to do if business partner is stealing?

My brother and this guy Jim went into business together opening up a pizza place.
There were problems and my brother wants out.
Jim keeps running the pizzeria and keeps paying the landlord and suppliers with their shared bank account. The credit card transactions that the pizza place generates keep going in the bank account which go to paying the landlord and suppliers. Jim pockets all the cash money flowing into the business. My brother wants to sell his half but feels threatened by Jim. (Again Jim is keeping all the cash profits and my brother just wants out) What should my brother do?

 

 

Personally, I am studying accounting and this is a common problem. If you have internal controls in your business, it increases accountability and discourages theft not because you don't trust them, but because you care. Compare the cash/inventory records with your actual totals. Double check if necessary. Make sure you did not post the transactions/add them up incorrectly. If the difference is small, it might be a coincidence. However, if a significant amount of cash is missing, that is definitely call for suspicion. Look for evidence carefully and if you have a good case, you should sue Jim, call the police, and/or question him. Don't be afraid to confront Jim because Jim has a level of accountability. He should have no problem explaining his business choices. When an employee varies deviates from company policy or good organized practices, it calls for suspicion!

 

Business partners are entitled to share profits among themselves. Equal division and equal distribution. If Jim gets all profits then your brother may sue him. But be sure that you have documents that can tell they are partners or a contract they have signed saying they are really partners and with equal distribution of profit, losses and expenses.

 

Do an accounting of the finances for the store, including the cash register tapes fo the transactions. Then have the other guy give Jim what is due to him. Then tell the guy that you are selling your half of the business - does he want to buy you out?

 

Call the police and file embezzlement charges against Jim

Talk with the bank, or get a legal opinion from a lawyer

 

 

 

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