Legal Question in Business Law in California

Can I legally take money out of my account when it is not my business anymore?

This is what happened! I used to have a business partnership. We have split and my business partners does not want to pay many of my vendors and does not want to do the work for many clients any more, which has affected my relationship with both parties (clients and vendors). My partners excuse is that he does not do that any more and he will not pay no matter what. The amounts are pretty low $2,500. Now, he has accounts under my name which I told him I don't want under my name anymore. And the question is: Can I withdraw money from those accounts to pay my vendors and clients what he owes them?

Note: Those debts have been there since before I left the company; therefore, they are considered my debts as well.


Asked on 11/21/11, 8:15 am

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

A partnership is a separate entity. Partnership assets, including money in its bank accounts, do not belong to an individual partner, and cannot be used except to pay partnership obligations or, when obligations are paid, to make distributions of profits, pro rata. Only partnership funds should be used to pay partnership debts. Funds in accounts under your name may be your funds, your ex-partner's funds, jointly owned funds that are not partnership funds, or partnership funds. I suggest that you use an accountant or attorney to assist you in determining who or what owns the funds, but even more important, to assist you in winding up the partnership business properly before someone gets sued or gets his credit ruined.

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Answered on 12/03/11, 10:49 pm


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