Minority owner have access to bank account and C.C

[sissylynn]

Minority owner to a business. My partner that owns 51% is the only one to have access to the bank accounts and credit cards. The P&L gets shared every month. But is it normal as an owner to not have access to the accounts. I'd have no idea if personal expenses are being ran through the business. It was brought up before which turned into a blow out of him being offended and defensive, then never turned over access.

 

[stargrl232]

@sissylynn As an owner, you should have access to all the books.

This should be covered in your Operating Agreement.

 

[dymesgirl]

@sissylynn His reaction is reason for concern - and yes all owners should have complete visibility to all facets of the business.

 

[613jono]

@sissylynn As someone's whose business was destroyed because of a thieving lying psychopathic narcissist who financially exploited me and stole from our company...

Any defensiveness over money is a red flag. He had narcissistic rages if you ever questioned to go over the books. It's all about entitlement, power, and control to a narcissist. Yet...they can't control themselves.

I don't know your situation but I'd be going over my operating agreement and finding a lawyer to ask to be bought out.

 

[szilvia]

@sissylynn the co-owners should have access to the accounts and books. end of story. there is no reason NOT to have access and ability to spend from it.

 

[risen145]

@sissylynn Yeah, should be spelled out in operating agreement. BUT, what OP is complaining about is VERY NORMAL, esp. in the beginning of a company. Majority owner WILL have some ‘management’ authority that MINORITY owner(s) do not have. There ARE good reasons for that. If I’m majority owner no way I’m giving access to banking to a minority owner. Trust is a fleeting thing in business. Control & experience IS important as an owner. Not all owners are capable of leading a company. But, ‘minority’ owners THINK they can. I’ve witnessed this very thing. The minority owners were overall clueless running a business well. They think majority owner(s) don’t do much. That’s far from true. 51/49 ownership IS a tight split, so I can understand OP’s side. Usually, majority owner has invested MORE $, etc. WHY is the other person majority? Probably a reason. BUT, by rule, monthly reports are due by the 20th of the following month. And, yes, ALL owners should get a copy & includes all banking transactions.

 

[zane4814]

@sissylynn Yes, owners should have visibility and access.

That being said we have an equity investor 25% owner that has access and visibility to everything, but we never gave him his business credit cards or debit card when they came in. I have them in the office safe, but he has never asked for them, and honestly has no need for them. His role is more of a silent position.

We did have to amend our corporate documents to state that we did not need his signature or approval to take loans or other financial actions. Previous to doing so it was hell trying to get him to meet us in person at a bank (Wells Fargo) to sign documents. They would not do remote and it was a giant pain in the ass.

 

[firmamentalist]

@sissylynn Read up on fundamental check and balance business operations. What you described indicates a 1 boss 1 employee relationship.

 

[ttowngirl]

@sissylynn You are an owner and should have full access to everything, that is the perks of being an owner and it allows you to do due diligence and check for fraudulent or unacceptable activities that you have mentioned.

 

[risen145]

@ttowngirl W r o n g …

 

[harrisonbergeron]

@sissylynn I think these things are usually outlined in an operating agreement. If you don’t have one, that’s mistake number 1.

If you’re a 49% shareholder and considered a silent partner why would you have access to bank accounts?

Having access to the books is another thing. You don’t need access to bank accounts to see what is going through the books.

Also let’s say you’re not a silent partner, I’d find it odd that one person has complete control over the bank accounts. And I would consider this a huge red flag.

Business bank accounts can be setup in such a way that there has to be authorization from 2 or more parties for transactions to take place.

If it was my business I would have 2 accounts. One would be an operating account, this would be for bills, payroll etc. I would have systems in place where all transactions much be accompanied by a PO and all POs have to be authorized by someone other than the person submitting them. This would be the same for payroll. Owners checks have to be signed by the other owner, there would be no signing your own check for payroll or disbursements.

The second account would be like a savings account and would be setup where money can only be taken out or moved with multiple authorizations.