I am a contractor. My business partner has been brought up on charges on a non-business related case. I am being sought to speak up for him in court. How can I not, he is my business partner? He will go down for his crime withoutout my testimony. Without him the business may not survive. We are not young, and been through a lot together. Even though we have been partners for years, there are skeleton's in the closet. in poking around found out some quite shocking things. Figuring that a tiger does not change its stripes, I turned inward. Suspicions I had for a long time started coming together. Example would be daughter 2 years out of college, with an average job, buying a Lexus. Found a 4 digit assist from daddy. We are also a government contractor. Can not afford to lose that business; although not really profitable, it is cash flow, keeps payroll going, etc. I don't remember any business partner liability clause in the insurance, but have to call my agent. We have an accountant do the taxes. What I am afraid of is "your the partner, you should have known..." and I getted hooked in this. I would like to answer honestly, but a simple "Have you ever known your partner to ever commit a crime or an act of wrongdoing?" and its over. At the time that he committed what he is being accused of, I did not have any knowledge of wrongdoing. If he is convicted, I feel the sharks will be circling. Many families at stake here. If I could figure this out, so could someone that really knew what they were doing (tax auditor for example). How do I honestly answer the wrongdoing question?
1 Answer from Attorneys
How do you honestly answer? That's certainly not a hard question and probably not the real question. The question I think you're really asking is should you step up and defend this individual in his current difficulties, and to what extent your defense of his interests may impair your own. If his suspect activities involved your business, remember that general partners are generally individually responsible for partnership liabilities without limitation. Since you classified this question as a tax question, I think you may want to evaluate the potential risk to you of remaining in the partnership, especially after you have presumably discovered irregularities. Maybe you should talk to a lawyer at greater length about what's really going on.