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  1. #1
    Join Date
    Nov 2010
    Posts
    4

    Default Misuse of Corporate Funds

    My question involves business law in the state of: NV/CA
    I am the majority shareholder/owner of an S-corp. Incorporated in NV. We do business in Ca. One of the other shareholder's/owner/Vice President has been using the corp credit card for personal purchases, including paying personal bills, etc. He has also been given numerous payroll advances when work has been slow.He has been warned repeatedly that personal use of corporate funds is illegal, yet continued to spend up to the monthly limit almost the entire time his card was active. Since June he has not re-paid any personal credit card charges, and has not re-paid any payroll advances since Aug. We have not had any corporate work for months due to the economy and licensing issues with Ca. He has been employed, for cash, mostly full time for the past 2 1/2 months, yet seems to have no money to re-pay the "loans" made to him by our corporation. I reduced his limit on the credit card to $1 on 10/13, and told him no more charges or loans. He has repeatedly attempted to use the credit card since then, and was successful in making a gas purchase on 10/18. What legal actions if any may the corp. take against him? No shares have ever been issued to him, he is listed as a 23% owner. Since the corp. has no profits, only debt at this time, I believe he is entitled to nothing. He has actually done nothing but taken funds from the corp. Any work he performed for the corporation was paid out as "hourly" or "commission" type wages.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Misuse of Corporate Funds

    You're the majority shareholder.... But not the decision-maker? If you have a controlling interest and are the decision-maker, after all, it would be within your power to discipline the employee, including writing him up, suspending him or firing him.

    If for some reason you must involve others in your decision-making, involve them and create a plan for dealing with this situation.

  3. #3
    Join Date
    Nov 2010
    Posts
    4

    Default Re: Misuse of Corporate Funds

    Done, fired today, all agreements for any ownership of corporation, stock, further compensation or demands of monies owed him(which is 0) are nullified, due to illegal activities. Termination letter sent 5 minutes ago.

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