About a year and a half ago i started a business with two guys. i was sort of a silent partner. the company it self had no credit because it was a new business so i used my credit to establish credit for the business. for about 6 months all was good, moeny was coming in and all the bills were paid.
about a year ago we had a few jobs and two creditors that we used to buy material. one day i get a call from one of the creditors stating that the bill has not been paid so i contacted my partners to find out what the deal was. i was told that we were waiting to get paid on a job and that it would be paid in full as soon as we received the check. months went by and the bill was never paid. then i started getting calls from the other creditors. in the mean time i wasn't getting call backs from my partners and when i did hear from them they would tell me that it was going to be taken care of.
now we are going on a year they have run the company into the ground and owe two creditors money plus a bank for over drawing the account by a massive amount. they haven't paid any taxes for the company either.
my problem is i have no legal contracts with these guys. however everything just about every single dime that was spent and used by either using credit or cash from the bank has been signed off by one or the other partner.
this has shot my credit score to a horrible low and i am also scared that the irs is going to knock at my door. i do not have the moeny to pay a lawyer because i invested alot of it into the business.
i am really screwed and do not know what to do. can i go to a police station and press charges on them? i am soo lost and fustrated because i was told there was little i can do.
Well the one easy solution is that you just declare the LLC bankrupt. Since it's a Limited Liability Company, no creditor can come after your personal assets.
The most important thing though that I hope you learned is to put EVERYTHING IN WRITING! No matter what! Even if you're dealing with Family!
I agree. You need to wind the LLC down and notify creditors, who may have rights to any remaining equipment or other assets. Hopefully you didn't personally sign for anything or you'll be on the hook for those items.
The other thing I would urge you to do is stop using the term 'partner' when talking about the other 'shareholders' in your LLC (you could incur liabilities as a 'general partner'). I'm not an attorney and this is not legal advice, just experience talking...
We've all been through this at one time or another - having to shut a failed business down. It's not a lot of fun. As has already been said, you have certainly learned some things and will do better next time.
The key is to not give up. Keep swingin!
You can consult an attorney. Many will take on the case for a share of what you get out of your partners.
Many will at least give you a free consultation and they will at least listen to the case and determine if it is worth taking on.
As others have said, you need to get everything in writing.
I would start gathering every shred of documentation your partners kept. Ledger books, accounting, all computers, etc.
Get a good attorney even if you have no money. You potentially have personal, business and tax obligations. This is no time to skimp on legal advice.
You can get expert advice from here or lawyers.com or lawguru.com, but use these for research purposes. Talk to an attorney as soon as possible. It's not in your best interest to delay this problem.
JoeGamer | Creator | 6/17/2009 - 11:05 pm
StuartR | Former Moderator | 5/6/2010 - 6:00 pm
rbraddy | Creator | 5/6/2010 - 9:28 pm
CarlLakeside | Creator | 5/7/2010 - 12:31 am
teamextension | Contributor | 5/7/2010 - 2:07 am
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