When a business partner finishes their contractual duties, you can expect the partnership to end there. But if there were things left unaccounted for after they leave, it can lead to investigations and damages, hurting the business’s bottom line. Holding the ex-partner accountable is crucial, even if it’s a process the business owner would rather avoid.
Recognizing theft in business partnerships
If a business partner steals from the company, taking legal action right away may be tempting. However, it’s crucial first to identify the theft that occurred during their time as a partner, such as:
- Tangible theft
Further, intellectual property theft involves taking ideas or trade secrets without permission and using them in a way that harms the company. Your business partnership contract should include a nonsolicitation or noninterference clause prohibiting your partner from treating your clients as their own. In that case, a breach of this clause is a breach of the partnership contract.
Building a case with documentation
To minimize your losses, it’s important to take action and gather enough evidence to support your claim of suspicious activity and strengthen your case. Some critical steps to take include determining how damaging the extent of the theft is by:
- Recording any and all damages done
- Inspecting the partnership’s financial records
- Collecting and storing all the documentary evidence
Documenting anything valuable can help build a case against your former business partner. And this may be necessary if you need to take legal action against them. Taking these steps can help keep your business safe from any future fallout.
A means to protect your business
If your business is suspected of fraudulent activities due to the actions of an ex-business partner, your clients may suspend all business interactions with you to protect their interests. This can result in loss of clients, revenue and potential legal action against your business. You may seek legal help to verify the evidence to protect your own business.