Legal Question in Business Law in Israel
Employee accountant Liable?
If two people are in an accounting partnership trading under the business name which consists of both their surnames employ an employee accountant paying her a set wage and 5% of their net profits from the firm.
Then 4 years later they agree to make this employee accountant a salaried partner. She would now receive 10% of the gross profits of the firm, Her name is to appear on the firm�s letterhead which she agreed to and she was introduced to all the clients of the firm as a partner. However she took no part in the management of the and it was agreed she would not be liable for any trading losses of the firm.
Three years later both partners abscond with the trust account leaving debt�s totalling $100,000. They abscond to Tel Aviv, Isreal which has no extradition treaty with Australia so the creditors of the firm are seeking to recover the $100,000 from the employee accountant.
Is the employee accountant a partner between herself and the two partner�s who employed her?
Is the employee accountant a partner between the creditors?
Is the employee accountant jointly liable, with the employers, for the $100,000 owed by the firm to the firm�s clients?
1 Answer from Attorneys
Re: Employee accountant Liable?
This is a serious situation and you should consult a lawyer and not rely on forums like this to get advice.
Here is the general proposition-
A partner in a firm can be liable for a wide range of activity in many areas of legal liability - contract, tort, crime and trusts.
The persons liable are the actual partners themselves as well as persons who may not have been formally admitted to the partnership but who have been held out to the world to be partners. This is an example of the operatiopn of the doctrine of estoppel. Estoppel means that if any person either expressly or by conduct represents to another person that a certain state of facts exists, and the other person acts on that represenation and incurs loss or damage, then the representor cannot deny the truth of the representation.
There may be liability here in relation to the trust account as well as the trading debts.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
