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bobp
12-11-2013, 04:26 AM
I am a silent partner with an equal stake in a company, that is formed a S corporation. Due to some financial problems and non payment of money owed to me I announced my intention to leave the partnership. No formal agreement has been completed on the dissolution of the partnership yet and the other partners have already removed my access to the bank. I believe I still have legal right of access to the bank because I am technically still a partner till the dissolution agreement is signed. One of the clauses in the partnership agreement was that all the members would have unrestricted access to all the bank information, this clause has been violated in my case. I want to know what legal options I have restore my access to the bank. I intend to get a report of all the financial transactions made by the business and audit them because I suspect some irregularities. Also, is there any penalty that can be imposed through the courts for violating the terms of partnership by blocking my access to the bank.

Thanks.

Freelancier
12-11-2013, 05:54 AM
The first step is to approach the partners who are operating the company and let them know that you'd like them to re-establish your access to the bank account until the actual dissolution is completed. If they fail to do that within, say, 5 business days, then you go to an attorney and let them handle this for you, because you're going to need to get a court order to enforce the contract.

As for your question about penalties: what does your partnership agreement state? If it doesn't impose penalties, then the court may not be interested in anything more than an order requiring them to reinstate your bank access. If they fail to follow the court's directive, then you may be in for penalties.

ARMGenius
12-29-2013, 05:25 AM
I am a silent partner with an equal stake in a company, that is formed a S corporation. Due to some financial problems and non payment of money owed to me I announced my intention to leave the partnership. No formal agreement has been completed on the dissolution of the partnership yet and the other partners have already removed my access to the bank. I believe I still have legal right of access to the bank because I am technically still a partner till the dissolution agreement is signed. One of the clauses in the partnership agreement was that all the members would have unrestricted access to all the bank information, this clause has been violated in my case. I want to know what legal options I have restore my access to the bank. I intend to get a report of all the financial transactions made by the business and audit them because I suspect some irregularities. Also, is there any penalty that can be imposed through the courts for violating the terms of partnership by blocking my access to the bank.

Thanks.

I'm not sure what business entity type you have, but since you mentioned members, I assume you have a Limited Liability Company that has elected the S-Corporation Status. If that is the case, all you need to do is consult your Operating Agreement. Your Operating Agreement will define your respective role, responsibilities and rights, along with those of your partners. If your Operating Agreement states you are allowed bank access, and it is signed by all of your partners, you should be able to walk into a local bank branch and have yourself re-added to the account.

Now I'm sure the bank will contact your business partners and notify them; which this might motivate them to take swifter action if you are taking these steps. Be sure to bring the appropriate documentation with you that you are a member of the company. Without it, the bank will think you're a fraud! Are you sure your Operating Agreement doesn't give the President or Managing Member authority to remove a partner from the bank account? Does the dissolution clauses state anything to this affect? What about the clauses that outline your dispute resolution?