Embezzlement is a crime that often involves high-level executives or financial employees within a company. These individuals already have access to the business’s funds, and embezzlement occurs when they misappropriate those funds for personal gain.
With that in mind, is it possible for a business owner to embezzle from their own company? They may claim that, as the owner, they have the right to do whatever they want with company funds. But is that always true?
It may depend on the ownership structure
If the business is a sole proprietorship, the owner may be correct in asserting that they can use company funds as they see fit. In a very small business with only one employee—who is also the owner—there is no one else to suffer financial harm, so they can take money from the company at their discretion.
However, if there are shareholders or outside investors, the business owner must treat the business entity separately from personal finances. Investors expect a return on their investment over time, meaning they anticipate that the business owner will use company funds properly to grow the business. If the owner takes those funds for personal gain, it could violate the investors’ rights.
Similarly, if the business is structured as a partnership, there may be multiple owners. Any one of those owners could be accused of embezzlement if they use company funds in a way that was not authorized by the group. Even though a partner is technically an owner, they still have a duty to prioritize the business and collaborate with the other owners in making financial decisions. Embezzlement would violate that duty.
Potential defense options
Embezzlement charges can be very serious, both professionally and personally. Those facing such charges must understand all of their legal options.
