Partner in a company doing fraud how can I protect myself

922 votes

Before preventing yourself, you have to share your partnership deed with us and also rules and regulations set up at time time of partnership firm. Weather its registered or not. Then only you can protect yourself from partnership firm rules and regulations

Advocate Manoj Kumar LawRato

870 votes

Partners are criminally liable for the fraud if anyone has committed. If you are dormant partner , you may be protected, but showing this is very difficult task. It may be proved only when you are not actively participating in doing business. You are only getting profits and your other partner are handling the course of business. You can also be protected if you are able to show that the alleged fraud was committed without your knowledge and you have to prove that the other partner has done this behind your back and you are also affected by the alleged fraud. Revert me. All the best.

Advocate Atul Patni LawRato

767 votes

Sir,
Please send the legal notice immediately and if required, depending on the gravity, a police complaint. Notice may be sent for dissolution of the firm. Also, your rights, duties and liabilities may been defined in the contract (as the relation of partnership arises from contract and not from status). Start collecting instances of fraud and siphoning of money, if done.
The rest can be discussed on perusal of the relevant documents.
Abhinit Das

Advocate Abhinit Das LawRato

852 votes

being a partner in a firm does not ipso facto makes you liable for all liability arising in criminal law. but you have to be careful and planned enough to guard yourself from the possible harm. A detailed consultation would be required for devising an effective strategy.

Advocate Atul Guleria LawRato

987 votes

Dear Sir,
It transpires from your query that you have quit the aforesaid partnership firm. Some informations are required to advise you properly.
(i) whether it was a partnership at will? or
(ii) whether it was based on a written contract, if so, what are the terms & conditions of the 'Contract'?
(iii) whether the partnership firm was registered or not?
(iv) whether you are a sleeping partner?

In case of fraud which impose a 'criminal liability', it is pertinent to mention here that there is no vicarious liability in criminal law unless the statute takes that also within it's fold. There is nothing in the 'Partnership Act, 1932 making all the partners of a firm liable for the criminal offences whether they do business or not. At best, the partners who are in charge of the business of the firm when the alleged offence was committed, may be liable for the offence and not the other partners who are no way connected with the business of the firm.
And more important you must not have any information about the fraud committed by the other partner, with due diligence diligence'
Even in a case of registration of a F.I.R. disclosing any cognizable offence against you, in that case you can approach the Hon'ble High Court to 'Quash' the same under section 482 of the Cr.P.C. seeking an 'arrest stay' as an interim measure.

Advocate Rajiv Saxena LawRato