Is there a legal procedure to force a business partner...

[alscar]

Boredanditsrainingout said:

Again, that's not what I'm asking.

Just assume that it is a legitimate business and that they are legal partners for the purposes of this discussion.

What legal method does she use to force him to account for the money?

Unless she can prove it’s a legitimate business though assuming anything legal isn’t going to work.
I think you need to speak to a local solicitor - it may be worth paying for an hours legal opinion.
Good luck in your / your friends endeavours.

[ATG]

You can't force him to disclose anything. A court might instruct him to. He might choose to disclose that information to defend himself if you sue him. There's no way you're going to be able to force information out of him first and then decided whether to sue him or not.

[M4cruiser]

Boredanditsrainingout said:

Again, that's not what I'm asking.

Just assume that it is a legitimate business and that they are legal partners for the purposes of this discussion.

What legal method does she use to force him to account for the money?

If it was a legal side to the arrangement then there would be business documents, accounts, companies house, etc etc, and yes there would be legal means, but I get the feeling in this case it's flogging a dead horse.

The legal costs will outweigh any recovery. He's spent all the money.

[Boredanditsrainingout]

ATG said:

You can't force him to disclose anything. A court might instruct him to. He might choose to disclose that information to defend himself if you sue him. There's no way you're going to be able to force information out of him first and then decided whether to sue him or not.

That is precisely my question. Can you initiate court proceedings to force a business partner to reveal what they have done with company funds? If so what court do you do it in and what legal principle do you employ?

I can't believe that a business partner cannot be forced, legally, to declare what they did with funds belonging to the business.

[Boredanditsrainingout]

M4cruiser said:

If it was a legal side to the arrangement then there would be business documents, accounts, companies house, etc etc, and yes there would be legal means, but I get the feeling in this case it's flogging a dead horse.

The legal costs will outweigh any recovery. He's spent all the money.

Yes, as I've said, it may not be worth pursuing. But she won't know until she knows exactly what the money was spent on. He may still have it, he may have used it as a house deposit for all she knows, in which case she could apply for a charge on the property.

[Forester1965]

Boredanditsrainingout said:

That is precisely my question. Can you initiate court proceedings to force a business partner to reveal what they have done with company funds? If so what court do you do it in and what legal principle do you employ?

I can't believe that a business partner cannot be forced, legally, to declare what they did with funds belonging to the business.

You'd have to claim against him for the money. I imagine you'll struggle to prove it was a partnership. There is no 'company'. There is the bloke and your friend.

It's not about proving what he did with the funds. It's about proving the money was given for a specific purpose, he didn't use it for that specific purpose and he has an obligation to repay the money.

Seriously, if you're their friend, tell them to move on.

[IJWS15]

I got so far and saw screenshots mentioned as proof of there being a business ….

No signed partnership agreement?

No ltd company set up!

Will be a case of he said she said …..

Was there a romantic entanglement that went wrong?

I fear your friends money has gone.

[Actual]

The money has been rinsed through personal accounts and has gone in the general spending pot so it will never be possible to know what the money was spent on.

For any business and regardless of if there is a specific bank account it should be possible to produce a simple balance sheet showing credits and debits associated with the business and at the bottom it all adds up to give a positive and negative value. All income and expenditure should be backed up by invoices and receipts. It needn't be more complicated than a household budget page.

The main issue is getting the other party to produce such an account.

[Boredanditsrainingout]

IJWS15 said:

I got so far and saw screenshots mentioned as proof of there being a business ….

No signed partnership agreement?

No ltd company set up!

Will be a case of he said she said …..

Was there a romantic entanglement that went wrong?

I fear your friends money has gone.

Well, again, that's not what I'm asking. She can talk to a solicitor who can advise whether there actually is a business agreement extant.

All I am trying to discover is, assuming there is a legitimate business agreement there, whether there is a legal method by which to make him prove where the money went?

It seems inconceivable to me that the law does not require a business partner to provide an account of their use of company money to the other partner should they ask for it.

And, in answer to your penultimate sentence. No.

[Panamax]

Forester1965 said:

Re-read the thread. Tell her to chalk it up to experience.

^^^ This, this and, errrm, this.
A fool and her money are easily parted.

[Boredanditsrainingout]

Actual said:

The money has been rinsed through personal accounts and has gone in the general spending pot so it will never be possible to know what the money was spent on.

For any business and regardless of if there is a specific bank account it should be possible to produce a simple balance sheet showing credits and debits associated with the business and at the bottom it all adds up to give a positive and negative value. All income and expenditure should be backed up by invoices and receipts. It needn't be more complicated than a household budget page.

The main issue is getting the other party to produce such an account.

Well, yes, that's the whole point of my question. Is there a legal route to force him to provide evidence of what he did with it?

We don't know where it's gone so we can't say that it will never be possible to find out what it was spent on. He may have used it for a house deposit for all we know. It may have been legitimately all used for the business but if so then why doesn't he just prove it? My friend strongly suspects that at least some of it most likely went from his account to his girlfriends account.

Edited by Boredanditsrainingout on Monday 22 April 20:35

[JQ]

You are fixated on the wrong thing. Your friend needs to take legal action to claim her money back. Everything else is just part of that process.

He can’t be forced to say where the money has gone, but if he’s going to defend her claim he would be wise to provide the evidence to the court.

[M4cruiser]

Boredanditsrainingout said:

Well, again, that's not what I'm asking. She can talk to a solicitor who can advise whether there actually is a business agreement extant.

All I am trying to discover is, assuming there is a legitimate business agreement there, whether there is a legal method by which to make him prove where the money went?

It seems inconceivable to me that the law does not require a business partner to provide an account of their use of company money to the other partner should they ask for it.

Ok, to answer your question:
It depends, because there are many types of "business agreement" and/or "partnership".
If there is a limited company then there should be filed accounts, and a statement of who is the director(s) and secretary. It's possible this existed but your friend wasn't on the list of people, so they will have no chance of asking the directors to do anything.
If there are shareholders then it depends on the % holding, and other factors probably. I'm a shareholder in a major Bank, but I stand no chance of asking the director any more detail than is on the published accounts.
Then there's '"partnerships". Sounds like this one was informal, so no, there is no chance of your friend getting any information. They are effectively a "silent partner". Was there a formal arrangement?
The above should give you a starting point, and it's only a starting point, to show that sometimes your answer is yes, sometimes it's no.
Most posters on here are saying that to find out where you stand will cost a lot of time and money.
I found this:-
"A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits. There are several types of partnership arrangements. In particular, in a partnership business, all partners share liabilities and profits equally, while in others, partners may have limited liability. There also is the so-called "silent partner," in which one party is not involved in the day-to-day operations of the business."

Good luck!

[darreni]

Your friend has no chance, move on before she wastes more time & money.

[hidetheelephants]

Forester1965 said:

Re-read the thread. Tell her to chalk it up to experience. Far too many hurdles to overcome, not least that people like the conman almost certainly will not have any money to cough up (or will be good at giving that impression).

Issues with (I presume)...

- No contract
- Potentially limitation (was it within the past 6 years?)
- Proving the money was/was not equity
- Proving the money was given only on the basis it would be used to buy certain things
- Is it a ltd company or a partnership she 'owned' 50% of?
- Experienced slippery operator who likely lies very well and knows how to frustrate processes
- Claim >£10k which means unlikely small claims track and exposure to costs and not a 'friendly' court for litigants in person

There is a contract, even if there isn't a written one with signatures. In some respects the lack of an enterprise simplifies pursuing the miscreant as it's just a MCOL against an individual.

[pork911]

Perhaps -
Make a claim for return of the money (on the basis that neither accounted for the loss or produced any returns, and within that process through defence and disclosure could get the information desired
Or, a standalone pre action disclosure application.

However, seems a thankless endeavour to find out what? He's spent it on himself and hasn't money to repay etc?

If commited to the principle or desperate to know the particular flavour of his failings instruct a solicitor and or expend time or money on likely not getting satisfaction of any kind

[oddman]

I wouldn't be so sure about no romantic relationship. Suspect there was some sort of relationship or persuasive behaviour to get her to hand over the cash. He certainly spotted a vulnerability.

Not surprised by response of police but seems to me this is a practised fraudster and he has probably tapped up several victims since.

[Eric Mc]

Boredanditsrainingout said:

Well, again, that's not what I'm asking. She can talk to a solicitor who can advise whether there actually is a business agreement extant.

All I am trying to discover is, assuming there is a legitimate business agreement there, whether there is a legal method by which to make him prove where the money went?

It seems inconceivable to me that the law does not require a business partner to provide an account of their use of company money to the other partner should they ask for it.

And, in answer to your penultimate sentence. No.

Unfortunately for your friend, she gave money away recklessly and carelessly without any checks or assurances (other than very sloppy verbal assurances) and she subsequently found out that she had been scammed.

It looks like she has no genuine evidence with which to prove her claim so the simple answer to your simple question is that she does indeed have no legal redress.

[Steve H]

This is the crux of the matter.

JQ said:

You are fixated on the wrong thing. Your friend needs to take legal action to claim her money back. Everything else is just part of that process.

He can’t be forced to say where the money has gone, but if he’s going to defend her claim he would be wise to provide the evidence to the court.

There may be other routes but ultimately you know he has taken the money without doing what they agreed to and she wants it back, suing him for it is the way to try to achieve this.


However, this is also true.

Panamax said:

Forester1965 said:

Re-read the thread. Tell her to chalk it up to experience.

^^^ This, this and, errrm, this.
A fool and her money are easily parted.

It’s harsh but she was daft and easily fooled, fortunately it was over an amount that while significant is not world changing and she can make it back in less time than she would waste chasing this guy.

[Panamax]

Steve H said:

It’s harsh but she was daft and easily fooled, fortunately it was over an amount that while significant is not world changing and she can make it back in less time than she would waste chasing this guy.

I think that's the key thing, there's no point throwing good money after bad or expending a lot of time and effort for no worthwhile reward. It's almost certainly more efficient to swallow hard, take a deep breath and move forwards with something more constructive.