I started a business with two coworkers and I’m doing all the work

A reader writes:

Two years ago, two coworkers (Sam and James) and I quit our jobs and began our own business doing something similar. We decided to keep operations as equal as possible: we would each be billed as co-founders, receive the same amount of money each month, and collaborate on tasks as much as possible. That worked for about one month, but now I’m finding myself taking on a lot more work than the others.

We’re stuck in this frustrating loop of not making enough money from our main revenue stream, so we’re working other jobs, which take up much of our time and leave us unable to apply for grants (our second, as-yet-untapped revenue stream) and also keep the business running. Over the winter, I worked a very demanding full-time job that prevented me from doing really anything for the business, and as I was burning out I confided in my partners that I didn’t see this being sustainable for me. I got a lot of empathy but not a lot of action. I’ve since switched jobs, and that’s helping me do more work for the business. But I now feel that I’m picking up the slack and doing much more than my partners.

Our management style to this point has been pretty casual, which is very much to our detriment. Sam, who is unofficially in charge of the money, is not taking it seriously enough: he has failed to set up a bank account, after I have insisted, reminded, and otherwise pushed the issue at least a dozen times. The money is in his and his wife’s joint checking account. (I know this will raise questions of money mismanagement but Sam is not that kind of person. I know that sounds like a lame answer but knowing Sam and his personality, I cannot stress enough how not worried I am about that.) I have asked, his wife (who I know separately) has pushed him and asked me to push him, and nothing. From the beginning I asked for my role to not include financial responsibility because I’m honestly not comfortable with money and would prefer to focus on other operations, so I’m not inclined to just jump in here and take it over (especially since it seems like Sam often gets bailed out in this way). But I understand that we’re going down a really bad path here, and I don’t want our business to fail because Sam doesn’t take action he is responsible for.

I’m finding that the best course of action here would be to write up our job descriptions, weight the tasks we complete, and redistribute titles and pay accordingly. If we honestly wrote out everything we did, the disparity would be clear, and I think we’d need to reassess the idea of equality. But I’m hesitant to do so because I know that James relies on this money and would not be happy or okay with getting less, and Sam always swears that he’ll do better when called out … and then never does. I think it’s a possibility that they’ll leave if I attempt this coup, and James is an industry veteran, so his departure would signal a loss of credibility for the project (people in town often mistakenly attribute this project to James entirely, which I correct privately as much as I can).

I’ve floated before that I’m tired of picking up the slack, but I usually get some form of “we appreciate you,” not “what can I do to help?” Conversely I feel like I end up picking up a lot of the work, which burns me out but is necessary to keeping this business that I love and believe in afloat. When venting about this to friends or family, I usually get some form of “don’t do the work and just let it slide by,” but that’s not an acceptable answer for me: if I don’t do it, it doesn’t get done, and it needs to be done, period.

I guess I’m asking for a script to help us establish some structure in a way that lets us keep as much equality as possible while also holding us accountable. Or for you to tell me if I’m totally off-base here. Help!

Do you really want to be in business with these guys — as they actually are, and not as you hope they could be?

Your instinct to write up our job descriptions, weight people’s tasks, and redistribute titles and pay accordingly makes a ton of logical sense. It’s what should happen! But it doesn’t sound like that will go over well. You can try it — it’s an eminently reasonable thing to raise — but I’d start thinking about what you’ll want to do if they don’t go for it.

There’s what’s logical, and then there’s what will actually work (or not work).

Here’s what you know for sure:

* You have told Sam and James multiple times that you are burning out and taking on too much (and much more than they are), and they have made sympathetic noises and changed nothing.

* You have pushed Sam at least 12 times to set up a bank account and get the money out of his personal account and he hasn’t done it. I’d be concerned if you had to ask twice. You’ve asked 12 times and nothing has changed.

* You are worried the business will fail because your partners aren’t taking the actions they are responsible for. (Are they worried? Or do you get to carry all the worry for the three of you too?)

You are in business with two people who are content to let you do all the work while they do little and get paid the same as you.

It is very, very unlikely that you can cajole them into doing more. If they were going to do more, one of your previous talks would have already spurred them to.

That’s why you’ve ended up at “well, let’s change the pay arrangements then.” But assuming they don’t go for it, then I would strongly, strongly advise that you reconsider staying in this partnership. (Actually, I’d strongly advise that you reconsider it regardless, because they have shown themselves to be unreliable partners, and that’s likely to keep coming out in other ways even if they agree to a restructuring, which it sounds like they won’t.)

You are trying hard to make this work, and taking on large amounts of stress for yourself in those efforts. They are not trying hard to make it work. If nothing about those fundamental dynamics changes, how long are you willing to keep doing it?

I think, unfortunately, you’ve got to see it for what it really is, not for what you were hoping it could be.

Read an update to this letter.

{ 395 comments… read them below }

  1. WhoKnows*

    OP, get your money out of that account and run as fast as you can away from this. If anything, I think you should start your OWN business! You clearly have the know-how – you just need to find people who share your vision and your sense of work ethic.

    1. Caramel & Cheddar*

      Yes, this — if they can’t pull their weight when the business is very small, how do you think things will go when it gets bigger and demands even more of your time?

      1. Sloanicota*

        Right, best case scenario this business becomes very successful and the demands – increase, but you’ve got these two people on your team? That’s not a winning situation for you OP.

        1. pancakes*

          Yes. And they’re two people who apparently share the letter writer’s view that it’s ok to bypass all the rules about not commingling personal and business assets when someone is “not that kind of person.” As if rules and legally advisable arrangements are only for sketchy people. It’s a bit backwards.

          1. Sloanicota*

            Exactly! In some ways OP is actually *benefitting* right now from the fact that the business has not been all that successful – meaning it’s okay if the funds are being comingled bc there’s probably not a lot of money or net loss, the taxes are NBD, people can handle the workload in addition to other jobs, etc. That wouldn’t work in the best case scenario, where OP’s business is growing all the time.

    2. Warrior Princess Xena*

      Seconded. There is a fundamental mismatch between how Sam and James are looking at this and how OP is looking at this. Nothing here suggests a long and fruitful business partnership. Do not pass go, do not burn out from overwork.

      1. Gan Ainm*

        Yep, and really why would they want anything to change? They get equal pay with none of the work, this is a dream arrangement for them.

        1. Everything Bagel*

          Yeah, James depends on this money…that OP earns for him.

          What if something happens to cause Sam to be sued by someone and this business’ cash appears to be Sam’s assets? Just a thought.

          1. pancakes*

            It’s a good thought to have because my understanding is that he’s needlessly opening his assets to the possibility of civil liability for business issues, and ruling the company out of some deductions it would otherwise be eligible for. It’s just a terrible arrangement, and it’s terrible he’s been so resistant to getting it sorted out. I would advise against getting further entangled with someone who does business this way.

            1. Kevin Sours*

              He almost certainly is, but keeping the money in a personal back account has nothing to do with it. This is almost certainly a General Partnership. Each partner is jointly, severally, and personally liable for the actions of the business regardless of which partner undertakes them or whether they are even aware of them.

              1. BubbleTea*

                Does the fact it is in a joint account change this? Seems to me he is placing that money at risk from his wife’s potential liability for things entirely unrelated to the business.

                1. Kevin Sours*

                  As I read it, that money is already at risk. In a General Partnership people can go after your personal assets for business liabilities.

    3. CharChar*

      I second this, run your own business. Hire a (parttime) accountant to help you with the money knowledge and get a system you’re comfortable with set up from the start.
      Right now James gets the credit when you do the work. You will never build up your own reputation if he keeps getting the credit. It will be a struggle in the beginning but think about the long term goals you have.

      1. Sloanicota*

        In their own new business OP could also consider contracting something specific to James if they really feel like he contributes something critical to the process. Done well this could reduce hurt feelings but no promises. It’s a whole different ballgame to say “I’m paying you X specific amount for Y specific thing,” particularly if it’s time-limited, versus “we are partners forever and all money is our money.”

        1. Serial Entrepreneur*

          If James is doing none of the work and getting all of the public credit, stop correcting people privately. Set up your own company and let James take the heat when you current company fails due to his lack of work.

          1. another idea*

            It sounds to me a little like the OP and James might be bringing different values. OP is doing a lot of the work, but sounds like James has some sort of important industry recognition/knowledge. Sometimes those people do get to do less of the legwork because they are valuable enough! Is that the case here? I don’t know. Just a thought of a possible dynamic that might be in play.

            1. Sloanicota*

              Sure, that’s a dynamic, but (this could be its own whole letter) – is OP happy being “the woman behind the man” who does all the work while he rakes in the credit, and is she being paid the amount that it would make her happy to do this? I would be willing to do this for twice the price I would take for being acknowledged for my contributions, and I know “ideas people” who do value their Pavement Pounders this much … if OP is *not* looking to play Pepper Potts (ok bad example bc I think Pepper isn’t an inventor, Tony is) … to play Remington Steele, does OP have a plan to receive credit for this business and does James agree and actively play a mentorship role? OP needs to be crystal clear on this, because it’s terribly easy to fall into this dynamic accidentally and never receive credit, particularly if James is an older white guy and OP has any marginalized identity. Like, the-entirety-of-recorded-history type easy.

            2. RebelwithMouseyHair*

              Yes I have a friend who is in a similar situation to OP. His partner doesn’t put in the hours, but she does happen to be very talented at schmoozing, and has managed to convince several people to invest in their project. It’s vital, but the others are rather upset at putting in a lot of spade work, when she just has a beer with the right person and gets them to promise to put up a ton of money.

        2. somanyquestions*

          OP doesn’t need to care about hurt feelings. These people aren’t her friends. They have been using her for 2 years to provide them with income while they didn’t do any of the work. Friends wouldn’t do that.

    4. Serial Entrepreneur*

      OP, I am a three-time entrepreneur. I left company #2 within a year because I was in the same position as you. That was over five years ago, and as far as I can tell, the company is doing absolutely nothing. I can assure you that your partners will never, ever, change.

      If you are doing all of the work, you should have all of the equity. Thank your partners for the time, officially leave the business, and incorporate your own. If you need people to help, hire employees when you have enough cash in the bank. That way, you can let them go if they don’t do the work (but I bet you won’t need to do that).

      1. pancakes*

        I agree, and I would also say there’s an argument to be made that their equity in the business has increased, by way of the disproportionate breakdown of work. If the letter writer wants to sell their share of the business to their partners at some point, they should be sure to get a fair price for it in that sense.

    5. learnedthehardway*

      Came here to say exactly the same thing. The OP is the only person taking this business venture seriously – they should carry on alone, and independently. Hire some staff (or get some temp support) when you get the momentum and revenue to a point where that is appropriate.

    6. Generic Name*

      For real. I pretty much stopped reading when you said the business money resides in a personal joint account. Just no. I know you are super duper not worried about anything shady going on, but I’m afraid you are being extraordinarily naïve. He is either so lazy he can’t be bothered to set up an actual business account you have equal access to, or there is something shady going on. Do you KNOW you are getting your third of the money? How do you know that what you’re getting isn’t less than what you’re owed and your business “partner” and his wife aren’t taking the lion’s share. Why would you want to be in business with someone who “handles the money” who either can’t be bothered to handle the money correctly, even if “they aren’t like that” and you trust them and their wife to be totally above board with the money you’ve asked a dozen times to handle a different way.

      1. Sherman*

        I’m in legal so all I can think when OP said that was, I sincerely hope your business doesn’t get sued! Even if you think it’s a small chance, by not having a separate business account, you’re risking being held personally liable. Same concern if you aren’t incorporated in some way as an LLC, Inc. or LP; it’s meant to protect you!

        1. PinkCandyfloss*

          This was where my mind immediately went. The business’s money not being in the business’s account has SO MANY risks & implications. It is unthinkable that your business’s cash is sitting in a private account, unprotected, as are you quite frankly.

          1. Grizabella the Glamour Cat*

            100% agree.

            If I was Sam’s wife, I wouldn’t be nagging, I’d be screaming. At the top of my lungs. As in, “Get your freaking ass to the freaking bank and freaking take care of this already!!!” Complete with a deadline by which he MUST do this or else the next communication he receives from me will be through my divorce lawyer.

            I am serious, because this IS serious. It’s an absolutely unacceptable and untenable situation, for EVERYONE involved, for all the reasons that have been clearly outlined by other posters, and being embroiled in it as one of holders of that joint account would drive me around the bend. How much o.p. trusts Sam is pretty close to irrelevant, because of all the other myriad and sundry ways that this could go sideways.

            Please get out, o.p. Get out get out get out!

      2. The Prettiest Curse*

        Yup, the bank account thing is an incredibly bad idea, even if you would trust Sam with your life. My dad’s business partner managed to embezzle money from their business (to buy sports cars) even though they had a business account, and the stress of the situation was a contributing factor to my dad’s death from a heart attack.

        If Sam (or his wife – even if you trust him implicity, what about his wife??) ever decides to dip into the business funds, you will have no way of proving it and no recourse. Do not put up with this any longer. If he was going to set up the account, he would already have done it. The fact that he hasn’t shows that he is not taking his part in the business seriously at all.

      3. Just Your Everyday Crone*

        Even if they’re 100% trustworthy, it’s STILL a bad idea. What if Sam and his wife were to die or become incapacitated? And do potential clients ask about their financials? Is it legal to say the company has $x cash if it’s legally titled to someone else? Also, they’re not going to get grants with their money in one of the owners’ bank accounts.

        1. TeapotNinja*

          Having gone through a few due diligence exercises in more than one company, thankfully not as anyone responsible for finances, but still got to observe the process pretty closely, I am 100% sure that not a single investor (unless incredibly unprofessional) would invest in a company that keeps its money on personal checking account of one of the founders Nor would any established company ever engage in any major business, acquisition or partnership with the company, if they found out about that. There’s just no way.

          It’s not merely a trust issue.

        2. Kay*

          And this has been going on for TWO YEARS! I’m wondering – have they been filing their taxes?? I would be thinking about how much of those monthly payments are going to need to be put towards attorney and accountant fees when this goes sideways.

      4. Miss Muffet*

        totally. setting up a business account is not that hard; there’s no reason this dude couldn’t have gotten to it by now.

    7. quill*

      Yep. The money thing should have been taken care of within months of starting this endeavor.

      1. Lizzo*

        Especially because that revenue needs to be reported to the IRS as business revenue, and I imagine there could be a whole bunch of problems if that reporting isn’t happening…OP, you don’t want your name connected to these issues if they arise! Take your fair share and divest yourself from these guys.

      2. ACL*

        IMO, the money thing, the bank account, should have been set up before anyone handed over their start-up funds.

        1. Very Social*

          Agreed, and I hope anyone reading this and considering opening a business takes that as a lesson–don’t put any money or work in until there is an account for the money.

    8. WellRed*

      Right? How is not setting up a bank account not the first thing you do! It’s been two years? You involve his wife? What about taxes. My god, what sht show.

      1. not a lawyer, but*

        First thing that should have been done was to set this business up as a LLC. WITH ITS OWN BANK ACCOUNT! You need to get your money out now and dissolve the partnership. Just leave. The ship is on fire and is sinking. Like someone pointed out, business income should be reported to IRS. Even if you’re operating at a loss, you need paperwork!

      2. Migraine Month*

        There’s something alarming the statement “Sam’s wife asked me to nag him about this business responsibility.” I don’t know if it’s triangulation, porous boundaries or enmeshment, but that’s really not how any business should work.

    9. Jonquil*

      This! And also, put some time into saving up a few months worth of living expenses before you start again, so you have some runway. I would also spend some time really planning your business and prioritising the actions you will take and work you will do when you are starting up in order to maximise revenue and make the business a viable income source.

    10. Public Sector Manager*

      I’m not one to jump to the conclusion “you need to get out,” but here it is right on the money (pun intended!). Dissolve this partnership, have them buy you out, sign over your interest … whatever. Just walk out the front door as fast as possible!

  2. Bébé Chat*

    OP, I know you don’t want to hear this, but pack your things and run. This will never work, and you deserve better.

    1. NotAnotherManager!*

      Yup. They lost me at “business money in joint personal account”. My spouse ran a small side business for a while – by himself, no partners – and that money was in it’s own account in the name of the business and nowhere near our joint finances. Even if Sam (and his non-company-affiliated wife) is the most trustworthy person ever who would never take the money, that’s a bad setup that they are essentially refusing to change after being asked multiple times.

      It is time for a very serious conversation with them about whether or not they are interested in being a part of this and what their contributions need to look like (either task management or paying OP more to handle said tasks). At minimum, there should be basic business incorporation, a business bank account, and defined responsibilities and turnaround times. If the partners can’t have a productive discussion around that, then it’s not a good fit for anyone. It sounds like OP is must more invested in this, maybe they could “buy” the other partners out?

      1. Eldritch Office Worker*

        Yes, after twelve asks he’s not forgetting or not getting around to it – he’s refusing. Regardless of his personality or anything else. That’s a GIANT red flag.

        1. Aspiring Office Plant Queen*

          The kindest possible reading is that he has some bad executive function problems and he genuinely IS forgetting or not getting around to it. I didn’t go to the dentist for 6 years due to executive dysfunction and only ever remembered that I really ought to schedule a dentist appointment when it was least convenient to do so. Perhaps he’d do it if he was given a deadline of “today” instead of “soon.” The thing about something like, say, ADHD, is that there are two times: now and not now. That can cause this kind of behavior. Yes, with multiple reminders. Yes, for months or years. It sounds ridiculous because it kind of is, and that’s why it’s considered a disability.

          That being said, this guy should NOT be the sole persom or even main person in charge of the money. Someone who is forgetful about money or gets mental blocks around these kinds of tasks cannot be expected to be the person responsible for business finances. If the consequences for dropping the ball are business insolvency and IRS audits, maybe the money should be handled by someone who’s a little less likely to drop the ball.

          1. Eldritch Office Worker*

            I have ADHD. If you can’t do this you do not have enough of a handle on your symptoms to be a business partner.

            I blame OP too, for letting it go on this long and not doing anything more active than reminding. When you agree to go into business with people you need to know them well enough to know their strengths, and be self aware enough to know what you can and cannot take over.

            1. Nesprin*

              I also have ADHD and manage my self-employed husband’s books. He has a separate business account because there is no way I’d take that risk with the IRS, liability, and his business finances.

              If OP has asked 12x and nothing has happened, it isn’t going to happen. And even if it does happen, there’s no way that OP should be working with partners that need to be asked to do things this important 13 times.

              1. Eldritch Office Worker*

                Yes. Professionals with ADHD find ways to do things for their jobs. Because generally speaking we thrive on structure and consequence.

                If the consequence of your business falling apart doesn’t motivate you, nothing is going to.

                1. Elder Millennial*

                  Or we hand things off! I know I have the knowledge to do taxes (I did some college courses on that stuff and passed them with good grades), but I just lack the executive function to start doing them in time, so I make sure I have other people in my life who do them (my partner in my case, since I am currently not responsible for any other taxes).

                2. Eldritch Office Worker*

                  @Elder Millennial yes! My husband handles a LOT of financial logistics for our household (bills that can’t be put on autopay, taxes, hiring contractors if needed) – I have an MBA I’m absolutely qualified to do those things it’s just way more likely to happen if he does it.

            2. Elder Millennial*

              I have ADHD and I know myself well enough to know that I would struggle to set up a business bank account. That’s why I should not start a business alone and should I do so with others, I would never, ever be the financial person.

          2. Clobberin' TIme*

            If you think disability makes setting up a business checking account hard, wait until you find out how it affects one’s ability to deal with an IRS audit or a lawsuit.

            1. Kella*

              The reason it *is* a disability (in the context Aspiring Office Plant Queen was talking about) is because knowing the consequences or how important it is to do the task does not change the fact that you can’t do the task. You can’t just logic around executive function.

              But as Aspiring Office Plant Queen also said, if that’s something you struggle with, you need to have support systems and safety measures in place so that you don’t have so much riding on your ability to do something you frequently cannot do. *If* a disability is at play, it’s still your responsibility to notice and address the problem when you’re still putting off this very important task the 3rd or 4th time.

              1. Clobberin' TIme*

                13th time, apparently!

                This is well beyond the point where Sam having an executive function issue or not is relevant. He’s not forgetting to refill the office coffee pot. He made a decision to be the ‘money man’ and is blowing off the responsibility of doing so, in a way that puts not only himself but the OP and their other partner in a very dangerous financial and legal position regarding their business.

          3. it's me*

            “I didn’t go to the dentist for 6 years due to executive dysfunction and only ever remembered that I really ought to schedule a dentist appointment when it was least convenient to do so.” This is my mother to a T. And there’s a reason I would not go into business with her, lol.

            1. Eldritch Office Worker*

              It’s me too! I’d never recommend me as a business partner lol. I’d take the role of advisor at best, and only on good brain days.

          4. pierrot*

            I also have ADHD and your anecdote about the dentist rings true to me. That said, in this case, he has his colleague (and ostensibly his wife) repeatedly reminding him. I get forgetting after the first reminder, but after the second time, the answer is to stop whatever else he’s doing and set up the new account right away. Unfortunately there have been times when I dropped the ball on something but the moment someone else (especially if it was someone who had a big stake in the matter) reminded me, doing the thing becomes priority number one. The issue at this point isn’t that he completely forgot to set up the bank account, because at this point he has been reminded by other people numerous times. He’s putting it off because for whatever reason, it is not a priority for him and that’s the problem. People with ADHD can absolutely support in business but if their business and their co-owners aren’t a big priority, the business will sooner or later fail.

      2. dogmom*

        Yeah, the day I started my business, right after registering the LLC and getting my federal EIN I went straight to the bank and opened a business account. Including my drive time to the bank, the whole process took maybe 30 minutes. It’s just wild that Sam is so laissez faire about not having a business account.

      3. WantonSeedStitch*

        This. Even if Sam is super trustworthy, what happens if he and his wife are, gods forbid, killed in a car accident? What chance do you possibly have of getting the money that belongs to the business?

        1. Jaydee*

          This! If the money is in Sam and his wife’s personal account, it’s not accessible to James or LW in the event of a situation like that. And it’s going to be presumed to belong to Sam and his wife. If either or both of them died, the business would likely need to file a claim in probate to prove the money is actually the company’s funds and not Sam and wife’s personal funds.

          Also, if Sam and his wife were to divorce, that money would be subject to the court’s jurisdiction in the divorce as marital property, and Sam would have to prove that a chunk of it was actually business funds and not personal funds.

          If Sam can’t be bothered to set up a separate business account, I can’t imagine he’s also kept detailed records of financial transactions on behalf of the business that could be used to support a claim that actually $X is business funds while $Y is personal funds.

          This makes me so anxious just thinking about it that I need to go back to doing work I don’t want to do just so I can calm down.

          1. Anne Elliot*

            Just to testify that this is not a hypothetical: I am right now dealing as an attorney with a situation where the board member of a small nonprofit commingled the NP’s funds with his own in his personal bank account, and then died. The NP cannot get the money back without filing a claim in probate and in the meantime is in very dire straits. The NP is so small that the money is not much but is all it had, and it is questionable whether the NP will be able to continue, with money coming due for licensing and regulatory fees that now it cannot pay.

            Setting up a business bank account is such a fundamental step in starting a business — and such an easy step! — that failing to do so calls into account not just the work ethic but also the judgment of your partners. You should definitely leave.

            1. DON’T COMMINGLE FUNDS!!! (Aka Jaydee)*

              Ugh. That sucks so much, especially when they have so little money to start with and then have to go through legal processes to recover it. As a lawyer I have spent a lot of time reviewing bank statements of conservators and POAs who mismanaged funds. When our state started requiring a bond in all conservatorships some people complained because bonds are expensive and lots of conservatorships are small. Yup. And you can embezzle $20,000 way faster than you can embezzle $200,000 or $2 million.

          2. Jaydee*

            Not to mention garnishments! If either Sam or his wife have personal judgments against them, their personal bank accounts can be garnished. A business bank account can’t.

            I really need to not read or think about this anymore for my own health.

        2. Irish Teacher*

          Yeah, no matter how trustworthy Sam and his wife are, would their heirs necessarily be as trustworthy?

          And I’m not a lawyer or an accountant or anything but I’m just wondering what if Sam had personal debts and owed a huge amount of money? Would his creditors be able to get hold of the business money if it’s in his personal account? What if his wife had huge personal debts? It would certainly look very dodgy if they claimed they had no money to pay debts and all the money in his account belonged to a business.

          1. somanyquestions*

            If he owed child support they could take that whole account. Then he’d have to prove that the money belongs to the business in court, and good luck with that as I bet money he’s not big on record keeping, too.

      4. One of the Spreadsheet Horde*

        If Sam is too lazy to spend the 30 minutes it takes to set up his own account, is he really putting in the work to track the business’s money in such a way that he knows how much you should make? Or if he’s handling taxes correctly? Even if he’s just lazy but 100% ethical, this is a huge liability.

        1. Hot tea, knitting, and cats*

          THIS. If Sam is not taking the easy step of setting up a separate business account, he is almost surely not taking the harder step of micromanaging these funds at all times to be 100% accounted for.

    2. Sloanicota*

      Yep, this was my thought. I remember a friend who was debating asking for a divorce from her husband; he wasn’t an active parent or housekeeper. He was like another child she had to manage. She was afraid to be a single parent … but eventually she realized it would actually be EASIER to just be able to run her house the way she wanted to without his objecting and making trouble. OP imagine if you could have just opened your own account from the beginning and been done with this.

      1. nobadcats*

        And, isn’t illegal, like federally illegal, to co-mingle personal and business funds?

        1. Hippeas*

          No, it’s not illegal – just opens you up to the risk of personal liability, even if you were an LLC or similar structure.

        2. The OTHER Other*

          In finance, it’s a huge violation to co-mingle client money and advisor/broker money, but in most cases it’s not illegal, just an extremely bad idea.

        3. L.H. Puttgrass*

          I don’t know about illegal, but for lawyers, co-mingling client funds with your own is one of the big huge “yes, you can actually get disbarred for this” no-nos.

        4. Kevin Sours*

          It depends on business structure. For a sole proprietorship there is no legal distinction between you and the business. The business funds *are* personal funds (note it’s still bad practice to comingle). For a general partnership I’m less clear, but that’s still not really a distinct entity from the partners (a general partnership doesn’t pay taxes for instance). For a corporate entity it is, though the likely consequences lean more toward allowing people to pierce the corporation to go after you personally for corporate debt than direct enforcement from the government.

    3. sometimeswhy*

      This. It is this bad in the early stages, It has been *consistently* this bad in the early stages. Your experience will never be better than the honeymoon phase. Plan your departure.

      If you follow the other commenters’ suggestions that you re-envision it with you in charge, hire an accountant or a business manager or both to handle the parts your not comfortable doing.

  3. Minnow*

    There’s no future for you here, unfortunately. It’s time to cut your losses and leave.

    1. Sloanicota*

      To be honest, I’m not sure OP’s business is working out very well. Only OP can know if it would be easier to walk away from the whole idea or to try to recreate it by herself or with new collaborative partners, but it sounds like you’ve been trying for a few years and it hasn’t really taken off. Did your business plan call for multiple years of no profit while you worked other jobs, OP? Or is it time to consider you may not be in the right niche for your work? I get it, I freelance, and I’ve had to look *hard* at my income and output many times, not getting seduced by ideas like “being my own boss.”

  4. Keeley Jones, The Independent Woman*

    Nobody ever thinks their friend will screw them over…until they do.

    1. RC+Rascal*


      Sam is stealing money. I know you don’t want to hear it, and he’s really nice, and you don’t think he’s capable of it–but that is the only explanation for his behavior

      Honest people do not comingle funds. They do not want any part of the responsibility of co-mingling funds. They do not want to be accused of impropriety, and they do not want the hassle of separating out what is your and what is theirs.

      You are being taken advantage of in many ways. Please get out.

      1. The OTHER Other*

        We are to take LW’s at their word and OP says they “cannot stress enough” that they are not worried about Sam stealing, but the comingling of funds is a HUGE red flag, especially as it goes on and on. What if Sam’s wife mistakenly spends money in this joint account? What if Sam and wife go through bankruptcy? What if they get sued?

        OP, you seem to think asking the partners to do more for the business more emphatically is going to work; it isn’t.

        There isn’t some magical phrase you can utter that will make them take their responsibilities seriously, because for them this is working out very well; they are both getting some revenue, and James is getting a boost to his reputation (based on your work), all while doing little to nothing.

        You need to get out of this partnership. They will of course try to avoid this with more promises to do better; stop falling for that. Once you’re out, you can determine if the business niche is actually viable and whether you have the skills, experience, and desire to make it work on your own, perhaps with hired help.

        1. La Triviata*

          Years ago, my father – who was a long-time employee of a large company – was tapped to be treasurer of a new division handling one specific product. It seemed to go well for a while, but it turned out that a co-worker he thought was a friend was embezzling and forging my father’s name on checks. The new division was closed and my father was able to go back to his previous position with the main company. It was a very painful experience for him and he was less trusting with friends and co-workers after that.

        2. I'm Just Here For The Cats!*

          what if they get a divorce?? since the money is in the joint account I think a judge would probably think that it was his funds and it would be divided between the two.

          What I want to know is why didnt they set up the business account before they did anything with money. The OP wouldn’t have had to be in charge of the finances to open the account. In fact I would say the OP needs to do that now. Go to the bank, preferably the same bank Sam has his account and then have him write a check to be deposited in the business bank account.

          Also I sure hope there is something in writing that shows what amount of money is yours so that you can take it and run!

        3. Cthulhu's Librarian*

          The problem I see with the OP’s statement is that there already is financial mismanagement happening. Oh, it may not be criminal (embezzlement/fraud/etc), but mingling personal and business finances, and not having a bank account set up for the organization where funds can be deposited, tracked, audited, checks cut, etc, is literally a definition of financial mismanagement.

          OP, you need to get away from this venture. It is all going to end in fire one way or another – none of us can say when that will happen, but from what this letter says about your coworkers, the question is very definitely one of WHEN, not IF it will end poorly.

        4. OP*

          I wanted to say how much I appreciated this comment in particular, especially “they will of course try to avoid this with more promises to do better.” I’m sure it’s clear that we’ve had this conversation many times. All the comments have been a huge reality check, but this one specifically was like WOW WAKE UP GIRL. I’m asking for a script but I really just need to leave and do it myself. Thank you.

          1. Liz T*

            Oof…are you someone who’s generally perceived to be a woman, and they both men? That’s…not insignificant unfortunately.

          2. Irish Teacher*

            I’m glad to hear the comments have been helpful and that you’ve made a decision on what you need to do. And fair play to you for reading through comments that may have seemed harsh at times or like we were missing context and not getting annoyed or defensive.

            I wish you the best and hope things work out for you in the long term. It sounds like you’re in a pretty difficult situation at the moment.

      2. L.H. Puttgrass*

        The only “charitable” interpretation I can come up with is that this business isn’t really that much of a going concern and there isn’t actually that much money to track. Having a bank account is so fundamental to any real business (including a partnership) that the lack of one makes me wonder about whether the business is more of a hobby for all the partners but OP.

        It reminds me of a time in college mumblmumble years ago when a friend and I decided to “partner” on writing a computer program that we hoped to sell eventually. We didn’t form a business, we didn’t open a bank account—and in the end, we didn’t write much code, either. OP’s situation sounds way too much like that, except with actual money involved.

        1. New Jack Karyn*

          This is definitely a hobby for the other two. They might view it as ‘passive income’.

      3. Nesprin*

        The biggest problem is not that Sam could be stealing money, it’s that OP has no ability to determine if Sam is stealing money and 0 recourse should he be.

        1. münchner kindl*

          Reminds me of the other post about the racist manager because of “intent”.

          It doesn’t matter if Sam is honest, but incompetent, or a thief who puts on a good front – the result is that OP has no way to check.

          Personal feelings come second in business: first come procedures, which show competence.

          It’s nice to be friends, but it’s not a requirement. Professionality is an absolute requirement.

      4. Danish*

        I can see a scenario in which I neglected to do something Very Important for two years, even wrt money (ND and all that), so I can believe Sam isn’t stealing… but also he’s not being responsible or a very good friend or co-owner, making OP do all the mental legwork and stressing about this. Whether or not he’s stealing, the business needs its own account yesterday.

    2. EPLawyer*

      Yep. And I can bet there is NOTHING in writing about the arrangement of sharing revenues equally or anything. Did you all put ANYTHING in writing about how this would work? Because right now, Sam and the other guy can just say “your share of what? We never agreed to that? You are an employee and were paid well. If you leave you get nothing.”

      Sam might be as honest as the day is long — but money is fungible. He is paying his personal bills out of that account which means some of his personal bills could be paid by company money. And your company bills could be paid by his personal bills. What a HOT freaking mess. What happens if he is overdrawn one month? Or even less, doesn’t put enough of his own money in but THINKS there is enough to cover his bills because the balance says so?

      OP you joined up with some people who are pretty casual about business. But you can’t be casual about it. Those norms exist to a certain extent to protect EVERYBODY. Right now your system is not protecting ANYBODY. Get out. Now.

      1. Keeley Jones, The Independent Woman*

        I would be willing to bet a lot of people who embezzle don’t go into it thinking they would ever do something like that. Then they spend a $100 for this and $50 for that, with every intention of putting the money back once they land the big client or get the grant, until it’s thousands and the business still hasn’t taken off.

        1. Mary*

          This. A good friend of mine from high school, who’s honestly just the nicest person, was convicted of embezzling tens of thousands of dollars. She would borrow a bit here and there to make ends meet, or what have you, and it snowballed. Up until the conviction I would have trusted her with my money, too.

          1. RebelwithMouseyHair*

            Thing is that people who do bad things don’t look evil like in cartoons. And they sometimes make an extra effort to seem nice so that nobody suspects them.

        2. Corporate Lawyer*

          THIS. It’s extremely common in accounting fraud and embezzlement cases that the fraud/embezzlement starts small and with good (or at least not bad) intentions. Someone tries to make ends meet by temporarily “borrowing” money from a corporate account with every intention of paying it. back, and then it happens again and again, and suddenly you have a massive problem on your hands.

          1. RebelwithMouseyHair*

            And of course because they don’t get caught, it’s that much easier to pretend it never happened…

      2. The OTHER Other*

        AND–It’s concerning that the person with the expertise and desire to handle the money has not bothered to open a business account in what, at least six months? And that’s putting it mildly.

        1. General von Klinkerhoffen*

          Keeping track of whose money is whose is way more work than opening a new dedicated business account.

          Even if everything is carefully accounted for and everyone survives and operates in good faith, who gets any interest earned on the account? Who pays monthly fees?

    3. Generic Name*

      THIS. Neither of the two conclusions you can draw from your “partner’s” actions are favorable and point to, “yes! do business with this guy!!”. One is you have a money guy who is so lazy/incompetent he won’t/can’t set up a separate business account and the other is something underhanded is going on. Your over the top protestations that the money guy “isn’t like that” makes me totally thing he “is like that” and is fleecing you.

  5. CommanderBanana*

    Um, I don’t know how to say this, but I would wager good money that the next email will be about how Sam won’t return the money.

    1. CommanderBanana*

      Also? This IS money mismanagement. OP, I cannot stress this enough, this entire enterprise is a man wearing a suit made of red flags at the Red Flag Store during their annual Red Flag Supersale. Setting up a bank account is not hard. If he hasn’t done it yet, it’s because he doesn’t want to, or the money isn’t there.

      1. Ama*

        If Sam’s WIFE is asking him to set the account up (and asking OP for help to get him to do so) and he still isn’t budging, he’s never going to do it.

        1. ABCYaBye*

          I sat here thinking that if I was that spouse and I looked at our checking account I might just scream, “HOW MUCH OF THIS MONEY IS AND ISN’T *OUR* MONEY?” over and over and over and over.

          1. Butterfly Counter*


            There are things I know my husband won’t do without a lot of nagging from me. It’s taken the length of our marriage for me to figure out which I am willing to just let go and which one or two to make my hill to die on and turn up the nagging to 11 so that he does them.

            Personally, if I was the wife, I’d turn it up to 20 and cancel our internet and cable, physically stand over him until he got up, got into his car, and with me accompanying him, drive to the bank and open that account. There is just too much risk and the overall impropriety is staggering.

      2. My heart is a fish*

        RIGHT. It doesn’t matter if the cash sits there tamely and he never spends it, he is already mismanaging that money by allowing it to sit in his personal — shared!!!! — checking account.

        1. GlowCloud*

          It could be compared to stacking the money in bills next to an open windowsill on a breezy day. Even if *he* didn’t do anything specifically to spend or lose the money, it’s a foreseeably precarious place to keep a lot of cash. Mismanagement is putting it mildly in either case!

      3. Richard Hershberger*

        This. I take the OP’s lack of concern about mismanagement to be confidence that Sam is not a thief. OK, I am willing to take that at face value. But comingling funds is so very, very problematic for a host of other reasons that what Sam is doing already is mismanagement, even if it isn’t dishonesty.

        1. Antilles*

          Agreed. For sake of argument, let’s assume that OP’s confidence is right and Sam isn’t going to steal the funds.
          There’s still concerns about what happens to the personal account if Sam passes away, what happens to the joint account if Sam/wife get divorced, what if Sam decides to resign from the company, what if Sam gets into some other legal troubles and the account gets frozen, etc.
          Or, even setting those situations aside, the pure accounting of this. How are you tracking money that the company receives (i.e., from sales) versus other deposits from Sam/wife into their personal account? How are you tracking expenses to verify what’s a business expense of a purchase versus a personal purchase (especially since both could be from the same vendor, e.g., Amazon)? And if Sam’s too lazy to spend an hour opening a new bank account, you can safely bet he’s not going to be able to help you with records here.

          1. quill*

            What if Sam, through no fault of his own, runs into a medical emergency and can’t manage the account for a while? What if that emergency is costly and the only repayment scheme he can wrangle is based on how much money is in the account? What if this goes on and Sam can’t get decent student loans for his kids because he technically has all the company money in his bank account?

            There is no way that this situation stays good for another 5 years.

          2. PB Bunny Watson*

            Imagine the poor wife. If Sam passes away, how is she supposed to know how much money belongs to the business vs. her family? It’s a scenario where either party could attempt to screw over the other one. It’s a terrible position to put everyone in.

        2. quill*

          Yeah, when “benign incompetence” is your best case scenario for how the money is being handled, you have a problem.

        3. Clobberin' TIme*

          I think my soul left my body when I read that part of the OP’s letter. Having a dedicated bank account for the business is such a basic thing. I don’t understand why this wasn’t done in the process of setting up the business.

          1. Antilles*

            I don’t understand why this wasn’t done in the process of setting up the business.
            My best guess is that it was never formally set up as a business. They had a good idea, had a handshake agreement on their “one for all, all for one!” philosophy, then jumped right into it.
            I’d bet that the bank account isn’t the only thing in the bucket of “should have been done when setting up the business but wasn’t”- a list which could include things like municipal business licenses, liability insurance, accounts receivable/invoicing, business expense tracking, etc.

            1. Serial Entrepreneur*

              I hope this isn’t a handshake agreement. If it is, OP, you need to get out even faster. I’ve started businesses with colleagues and we still had everything down on paper. You can’t control the future, so at least control your risks.

            2. münchner kindl*

              Yes – it sounds like there was zero admin work necessary before starting a real business: writing up a business plan, researching the legal requirements, doing the necessary legal steps…

              Writing up who does what would’ve been part of that, just like opening a bank account and figuring out how/ who does book-keeping.

              Yes, some people can take a hobby like sewing and make some money on the side via etsy – but once it gets big enough, you still need to think about all the admin/ back-office stuff.

              And that’s why it’s legitimate and reasonable for many, especially creative people, to decide to either:
              work as employee: fixed wage, no admin
              keep the hobby as hobby, and main income from other fixed / contractor job
              hire an admin expert person/ let a company do book-keeping etc.

              Not everybody can wear all “hats” of a business, but a business needs all different functions running competently to work.

          2. Clisby*

            I don’t either, and I know almost nothing about running a business. I pretty much handle the finances in our family (although my husband has access to everything) and I can’t even imagine the headache of dealing with a *business* whose finances are intermingled in ours. At the very least I would have opened a separate personal account devoted entirely to the business, but that doesn’t really make sense. As long as I’m opening a separate account, it might as well belong to the business.

            1. Le Sigh*

              I used to freelance on the side — it was a nominal amount of money, it was more for the experience to build a portfolio. But while I never went as far as to set up an LLC , the very first thing I did was establish a separate account at an entirely different bank from the one I normally use to ensure I was keeping track of what I made, what taxes I might owe, etc. It wasn’t a lot of money and it was just me, no partners, but I wanted a very clear paper trail.

      4. Lacey*

        Yes. This is an insane setup. One that could hugely backfire on Sam & his wife if they are ever audited. This is not how you set up a business.

        1. münchner kindl*

          Good point – it can backfire on Sam, too.

          What if his bank notices money coming into a personal account that looks like business? Since business accounts usually follow different rules, maybe Sam’s bank decides to convert his personal account into a business one, and he pays 3x the fees?

          And it puts Sam into temptation – as said above, many cases don’t start out as deliberate fraud, but as rough spot. Don’t temp Sam to become a thief when he is a honest person.

    2. Reality Check*

      Yeah OP I know you said you’re not worried about Sam handling the money but the bottom line is, IT’S STILL IN HIS ACCOUNT. We hope.

    3. EventPlannerGal*


      I recently needed to send my friend some money for rooms and activities for a hen night. She sent me the bank details, I said sure, I’ll transfer that ASAP, and then clean forgot. Just went straight out of my head. She reminded me a week or so later and I was so, SO embarrassed – I apologised, I transferred it straightaway and I still felt bad for forgetting because what if she’d needed the money? What if she thought I was trying to avoid paying her? What if she just thought I was really disorganised?

      This guy has been asked to sort out this issue TWELVE TIMES.

      If he hasn’t done it by now, he is pulling a Father Ted (“That money was just resting in my account!”) and actively choosing to keep this money in his personal bank account. There’s no good reason for that. If OP isn’t worried, they should be worried. Get worried.

  6. Not Tom, Just Petty*

    Good for you, manifesting your dream.
    You gave it a shot. It did not work.
    Walk away.
    While you are still friends.
    While you still have money (wherever it is)
    Have this one really hard conversation instead of two dozen little awkward ones.

  7. ENFP in Texas*

    For you it’s a business – for them it’s a hobby.

    Cut your losses, take your share of the money, and walk away.

    1. Glomarization, Esq.*

      I have a reply that went into moderation, and my reaction is similar to yours — though I’d say that the business is a hobby for all of them, including the LW, since they have not taken it upon themselves to handle the money property after the other participant has chosen to keep it all in his own bank account.

    2. bamcheeks*

      For James, it’s a hobby which is giving him money he relies on despite doing hardly any of the work… James does not want anything to change! Why would he?

    3. Morning Flowers*

      Yes. I was once part of a small business where, by the end, I was doing ALL the work, no one else was doing anything, and we hadn’t earned anything in years because when one person out of five is the one doing the work why WOULD we earn anything. (Yes I was also the only woman.)

      I quit, and roundly ignored several of my partners telling me to just chill and not worry so much, and let them keep their “toy business” because it was less work for me than legally dissolving it. I loved what we were doing. That didn’t matter. So far as I know they still have the business and I’m *sure* they haven’t filed all the required taxes without me doing it all for them.

      OP, spare yourself five years of misery. Don’t be like me.

  8. BeenThatDoneThere*

    Been there. Done that. Partnered with a couple of guys who really didn’t know how to operate a business, and I ended up doing the marketing, the service design, the website management. It doesn’t get better. It’s not a matter of the right people not knowing what to do. It’s the *wrong* people. Run. Quickly. Now.

  9. Glomarization, Esq.*

    What on god’s green earth kind of business is this where one of the participants is “unofficially” in charge of the money, and the business’s funds are not in their own, dedicated, business-only accounts?

    LW and their partners are not actually running a business. They have a hobby.

    1. Sloanicota*

      I’m sorry to say I think I agree. I know that’s hard to hear OP. I’ve been there. It doesn’t sound like this is working out the way you had hoped. It’s certainly possible that a business can grow slowly from very humble beginnings but nothing I’m hearing gives me the sense that’s what is about to happen. In fact, it sounds like there would be even more difficulty if business *did* pick up. If this were me I’d try to figure out the best way to exit smoothly.

    2. Cat Tree*

      Yes, even if he is completely honest about the money (and unlike many others I believe he might be) he is *incompetent* about handling the money. The end result is the same. OP feels like they can’t manage money, but surely they couldn’t be any worse at it than this guy.

      1. Irish Teacher*

        I agree that he might be, mostly because of the wife’s reaction. I suspect if he were embezzling, she wouldn’t want to draw attention to things and get her husband in trouble (unless she doesn’t know, which I guess is possible). Her reaction makes it seem like he’s just being lazy and she is as worried about things like the potential for this to cause trouble for her and Sam – as others mentioned things like student loans and scholarships or bankruptcy or other things that are based on how well-off you are – as the LW has reason to be about it causing trouble for the business.

        However, I still think he’s PROBABLY honest isn’t a good reason to give him unrestricted access to all the funds of the business and as everybody has said, even with the best will in the world and even if this guy is the most honest person imaginable, there ARE still NUMEROUS ways this can go horribly wrong.

    3. Clobberin' TIme*

      This so much. The OP can have a shared hobby with their friends, or they can run a business with their partners. The hobby is emotionally easier. The business is what makes money. The OP sounds like they are trying to keep the low-stakes, friendly approach to a shared hobby and doesn’t understand why they aren’t getting the same results as a for-profit business.

      1. Sloanicota*

        Right! Consider that one of OP’s key concerns is hurting the feelings of her partners / knowing that one of her partners depends on the income they get – these … are not business concerns, these are personal concerns. If OP was being business focused they would eliminate positions that are draining capital and not contributing. Mixing business and friendship has muddied the waters too much. It’s not that friends can’t work together, but they’d need to have a shared vision of success / agreement that the business comes first in business decisions.

    4. L.H. Puttgrass*

      I want to buy their accountant drinks (they have an accountant, right? …right?) and get all the juicy stories about what this partnership’s records look like come tax time. I bet they’re glorious.

      1. Fiorinda*

        I’m imagining what an autidor would have to have to say about it, and frankly cringing.

    5. Other Alice*

      “LW and their partners are not actually running a business. They have a hobby.”

      Counterpoint: I have a hobby, shared with a group of friends, that sometimes requires us to pool money and buy new materials, and sometimes we do events and we’re paid for it. The money involved is relatively a small amount, I think we have a grand in the bank now as we’re about to place a large order, but you can be sure that this money is in a business account that was set up at the very start of this venture. We have a treasurer who keeps us updated regularly, we have a charter and everything.

      And this is a hobby. This is something I do a couple evenings a week. This is not my livelihood. What LW has is a mess.

  10. Retreat*

    I’d get out of this business but since you don’t want to, maybe you could have a little retreat with them? Try one last time to get on the same page as them and plan together for the future.

    1. Heidi*

      I’m really pondering what kind of business this could be. It has some elements that are really informal, in that it each of the 3 people running the business have spent large chunks of time not doing any work on it and it didn’t go under. Plus it’s being run out of a personal bank account, which only makes sense if you’re Lucy from Peanuts doling out advice in the front yard for 5 cents. But there are also industry veterans and it can be funded by grants.

      1. Kay*

        In my experience, when you apply for grants they want to see business plans, financials… well, I guess I’ll stop there…

  11. oh no*

    I’ve been there, OP. As long as you’re there to pick up their slack, they’ll never change. I’m sorry.

  12. My heart is a fish*

    OP, get out of the business. These guys are not going to step up, and Sam especially is not at all trustworthy around money.

    Here’s the thing. You trust him not to steal the money. Great! I’m glad he’s such a good guy! But that is not the only kind of trust you need for someone in a position of fiscal responsibility, and he is failing you in a number of other ways:

    1) Just having the money in his personal checking account is a risk. What happens if he dies? That money is either part of his estate or automatically passes to his wife’s ownership, depending on how their checking account is set up. She is not, it sounds like, a part of the business, and has no fiduciary duty to the business. What happens if they get a divorce? That money will be treated as part of their household, because based on where it sits, it is. Is there anything at all on paper indicating that Sam essentially has received an interest-free loan from the business?

    2) It has been amply demonstrated that you cannot trust Sam to handle the business’ financial affairs responsibly. Opening a bank account for the business and getting that cash into the business’ legal ownership ASAP would be doing the minimum in his position, and he’s not doing that. If he won’t follow up on opening a business checking account (relatively straightforward), how can you trust him on things like filing the business’ taxes? Overseeing financial records? What else is he just coasting on because he doesn’t have that fundamental sense of urgency about his position as the business’ money guy? He cannot be trusted to do his job, and that means he cannot be trusted as a business partner, point blank.

    3) They are perfectly willing to let you take all the work on your shoulders, even when you have warned them it isn’t sustainable. If they don’t feel that the success of the business is urgent and personal for them, they will not do what is needed.

    This business is going to fail. Better to take it down intentionally, in a controlled way, rather than letting it collapse when you hit burnout for real.

    1. Sloanicota*

      Omigosh you are right, I hadn’t even considered what would happen if Sam died, was sued, got divorced, etc.

      1. All The Words*

        These were the first things I thought of. There are legalities & obligations to be met and no way can those things happen correctly with that money in Sam and his wife’s personal bank account. This is true even in the very best of circumstances. Now throw in an unexpected event and all bets are off.

        To be honest at this point I’d consider any money in Sam’s account already stolen/gone. Are there even adequate records if the other partners needed to sue to get that money back?

    2. Miko*

      Yes, this letter is reminding me about the letter where everyone at work contributed funds for some good cause, and then the person whose account they put the money into died before a check could be written, and it went to his family by default and there was no way to get it back.

      There are too many legal things that can happen with having business money in a personal account!

      1. Sloanicota*

        I guess the flip side is – OP, you can maybe ask the wife to cut you a check for your share, since Sam’s funds are comingled. Sounds like the wife is sympathetic.

        1. Irish Teacher*

          That sounds like the one positive here, that if the OP did set up a business account or ask for her money to be removed, it sounds like the wife might do it even if Sam won’t (or intends to and forgets). Otherwise, I’d be thinking it would be very difficult to get the money back, because if Sam won’t set up a bank account, I find it hard to see him dividing up the money accurately (not necessarily that he would intentionally take more than his share, but just that he seems like a procrastinator and he probably wouldn’t want the business dissolved, so I could see him thinking, “she might change her mind yet; I’ll wait a couple of days before giving it back to her” and then forgetting or convincing himself she didn’t really mean it).

    3. si*

      THIS, oh my god. Maybe Sam is the most honest guy on earth and would rather gnaw his own leg off than do anything actively nefarious with that money. There is still so, so much that can go horribly wrong with Sam sitting on all the cash like this. It’s perfectly possible to be pure, honest, and desperately incompetent. Or hit by a bus.

      1. Cthulhu's Librarian*

        And go wrong TO SAM, as well as the OP.

        If Sam ever gets audited, there are going to be so many questions about that account, and the origin of all the funds in it…

    4. Nobby Nobbs*

      A fool and his money are soon audited! Sam doesn’t need to be a bad actor to be a truly appalling money manager.

    5. xl*

      When I started my own small side business as a hobby, I went to a CPA to help me get everything set up correctly on the financial side. I still remember the first thing she told me:

      “The three most important rules: don’t commingle, don’t commingle, and don’t commingle.”

  13. CM*

    A relative went into business with two friends.
    All three guys are smart and hardworking. But they had very different levels of commitment, and were not able to get on the same page about that.
    The business lingered on way longer than it should have and they ultimately lost money and had some hard feelings when shutting it down.
    I see this scenario repeating with you. You asked for advice about how to keep everyone accountable, but from your description it sounds like only you are concerned about accountability. Your business partners have different priorities. Consider disbanding while you’re still at this early stage, and you can then pursue a plan that might work better.

  14. CatCat*

    OP, it may be worth talking to a lawyer about how to unwind the partnership and extract yourself. I’m not clear if the business has any debts (maybe some you don’t know about since you aren’t in charge of the money), but I would be very worried about that if money is being mismanaged.

    This does not seem like a viable partnership. You could consider starting your own business and if James’ name brings a lot of value, hire him as a consultant on the project rather than having him as a partner.

    1. Generic Name*

      Hey, the upside of the business money residing in a personal joint account is the OP can claim business debts are actually personal debts of the account owner. Seriously though, this just highlights how risky and poorly thought out the money arrangement is. It’s putting everyone, including the wife at risk. Get out now.

  15. Alton Brown's Evil Twin*

    Oh I can see so many problems.
    * If Sam hasn’t gotten a bank account, has he paid the company’s taxes?
    * Do you have all the necessary legal stuff – a partnership agreement or LLC?
    * What about liability insurance?
    * Besides ‘co-founder’, what are your titles? What about policies that lay out responsibilities – “Sam is supposed to handle the money” is not a policy.

    1. Richard Hershberger*

      This jumped out at me. Is there any sort of legal entity involved here? An actual partnership agreement, vetted by a lawyer? Or is this all a handshake arrangement? If that last one, which I suspect is the case, the OP’s exposure is breathtaking. This isn’t about Sam taking off with the money. The is about the business incurring liability in any of innumerable possible ways.

      1. Paloma Pigeon*

        This this this. OP, operations and money go hand in hand. Even if you aren’t the ‘money person’, you need to be able to see where you are financially at periodic intervals because you have to make operational decisions based on cash flow, projected income, vendor payments, fees, etc. Lordy. Get out get out get out.

    2. Richard Hershberger*

      Success can also make things go south. In the spirit of everything relates to 19th century baseball, the modern Cincinnati Reds first played in 1882. No one thought they would make money. That wasn’t the point. The ownership arrangements, inasmuch as they actually existed, were more about protecting themselves from responsibility for debts. Then to everyone’s surprise it raked in the dollars. The handshake arrangement immediately collapsed, the group dividing into factions, trying to freeze the others out. It took multiple lawsuits to sort out. The way to avoid this is to have formal documentation, informed by professional legal advice.

      1. Irish Teacher*

        I think there were similar issues with Facebook. Group of young adults messing about creating code and a website for their friends to chat on and then it becomes a global entity. I don’t know all the details, but it seems like the same sort of situation.

    3. Another Lawyer*

      Yes to all of this. I’m a lawyer and have tried to warn friends in situations like this, they wave it off, it almost always goes south eventually. Several years ago my childhood best friend called me, all excited about how she was going into a partnership with a friend to own a yoga studio. I offered multiple times to review their partnership agreement before she signed it…was told there was no need, she’d known the friend for years, friend had already owned the studio for years, etc etc. Six months later, she calls me, distraught, on a Friday night. Friend had moved out of state and was doing none of the work for the studio (my friend was teaching like 10+ classes/week on top of her full time job), but was refusing to dissolve their partnership and allow my friend to either buy her out or be released from the agreement. So I look at the “LLC Operating Agreement” and it is a mess. Clearly some online template, it had paragraphs that were totally irrelevant and/or unenforceable but was missing things like specifying their respective contributions/obligations and any mechanism to force termination. I had to tell my friend she needed a lawyer in her state and it cost her several thousand dollars to get out of it. People never think these situations are going to go south until they do.

      1. Richard Hershberger*

        Some years ago my church went through revising its constitution and by-laws. The process was every bit as fun as you would expect. Some members questioned why it was necessary. My answer was that it was entirely possible that this document would ever be relevant to the life of the congregation. Furthermore, we should pray that this is so, because the document doesn’t exist so we can sort it out, but so a judge can. The worst case scenario is frozen accounts while the bank waits for a court order, and a sheriff’s deputy at the door as the locks are being changed. I don’t expects any of this to ever happen, but one way to help avoid the worst case scenario is to be prepared for it.

    4. FridayFriyay*

      Agreed. The money not being in a business account is the tip of the iceberg of the likely financial, legal, and tax implications of mismanagement of that component of the business. And let me tell you from hard won experience, if there’s any sort of LLC or formally recognized business involved, it becomes incredibly difficult for an individual partner to correctly complete their own taxes and properly pay what is owed to the IRS and state. It will hold you up and you will likely end up with outstanding filings that are nearly impossible to fix without participation from your business partners. Trust me, it will become a problem if it hasn’t already.

      1. Kay*

        This. It is important to remember that claiming ignorance doesn’t get you out of the mess, and it sounds like this business is quite the mess.

  16. Old Cynic*

    Wait! The IRS really has a problem with co-mingling personal and business funds like that. They tolerate it if you are a sole proprieter though.

    1. My heart is a fish*

      Yep, and with three of them it sure isn’t a sole prop. Sam is already up to the eyebrows in mismanaging this money.

    2. bamcheeks*

      Yes, OP seems to be really unclear on the difference between “this is not ideal but it’s OK because I trust Sam” and “Sam is potentially breaking the law / committing financial malpractice and depending on how this business is legally set up I may also be liable for this”.

      1. fieldpoppy*

        Yes. I don’t agree with all the folks above saying “he’s stealing money” — I actually doubt he’s actively misusing the funds. I have been running my own consulting business since 1995, and running a charity since 2008, and I’ve had conversations about this kind of thing with many many people, and there are a stunning number who just can’t wrap their heads around the administrative side of things. A shocking number who don’t know how to charge HST (I’m in Canada), how to set up even moderately transparent revenue flow processes, and how to deal with banking. It IS pretty straightforward, but there are many many people with deep avoidance. There is a lot of complicated stuff around people’s relationships with money, with “authority” (IRS or CRA), with transparency. There are a million reasons why this is situation is unsustainable, but they’re a lot broader than “Sam is a thief.” I think Sam is a great SME and really terrible at running a business. Cut your losses, OP.

        1. My heart is a fish*

          Agreed. I don’t think he’s (consciously) stealing — only that there’s an enormous gulf between “not actively stealing the money” and “trustworthy financial manager.”

    3. Emmie*

      Excellent point. The NPOs or agencies issuing grants will have a problem too. They may require repayment or other consequences.

      1. Foley*

        What would happen when the granting organization asked for the business’ tax ID number?

  17. fellow sufferer*

    When I was just starting my own business, I took a course at the local chamber of commerce, and the instructor could not stress one thing enough:

    Have an exit strategy.

    Mostly they meant this in a financial way, but businesses (especially small businesses) fail so often that it’s so so important to have a plan for if things don’t work out (like a prenup before marriage, it’s not sexy or fun to think about, but can be very necessary). Like Alison said, I think you should start planning out how you can extricate yourself if necessarywith a minimum of damage (financially, emotionally, etc.), even if you do continue to try to convince them to change their tune. Best of luck to you, LW.

    1. Sloanicota*

      Right! This isn’t a “failure” OP; it’s semi-expected that most small businesses will not make positive returns long term. You tried it so you could find out if this was going to be one of the few exceptions, but it doesn’t sound like it is. This is great information so you can think about your next move.

    2. Willis*

      A written, legal agreement is not just important as an exit strategy. It should be what governs how they’re paid, how they make decisions, what rights and obligations they have as owners of the company, etc. even in a functional company.

      But really, this sounds like such a mess that I don’t think its worth getting in any further with these guys. OP should get their third of the money and get out.

  18. ABCYaBye*

    I’ll take OP at their word that Sam isn’t the type of person to steal money.

    BUT… If Sam won’t go set up a bank account (and didn’t day 1 of the business) then Sam isn’t going to contribute to the business. I won’t use the word lazy, but… if you and his wife have said things and he’s not doing it, I don’t have a lot of faith that Sam is actually pulling his weight anywhere since he can’t be bothered to set up a bank account.

    On the one hand, I want to tell you to get a check from Sam for your portion and run. But if you want to try to make it work before you decide to move on, I think it might help to bring in an outsider to help facilitate a conversation about the job duties/pay. You are friends, and this is going to be a difficult conversation, so someone who is just looking at the basics of the business structure without emotion will be helpful. Each of you should provide that person with a list of the things you’re doing and how you’re splitting revenues, and let them hear you all out. Then let them come up with the specifics of what each of you will do. Let that play out for an agreed-upon timeframe, circle back following that and reevaluate if needed.

    1. Richard Hershberger*

      The thing with setting up the account is that this would be a quick trip to the bank: In and out in under an hour. Sam is not a thief, but he certainly is a procrastinator. This is a bad trait in the money guy.

      1. ABCYaBye*

        Exactly. And honestly, as others have pointed out, Sam may not be intending to steal, but if something happens in his marriage, or if he’s sued, the assets in that joint personal account belong to the couple…not the business. So that money could walk away from the partners even if Sam doesn’t “take” it from them.

      2. Sloanicota*

        I also think it’s a bit revealing that OP did not start an account after the second or third time asking. This is not a major lift. It’s a pretty quick thing to do. I get that OP might not feel like it should have been their job, but that kind of passivity is not a great match with small business success, to be honest. I always think it’s tough when someone just wants to do the production side of something and hopes someone else will handle the business side; that’s just such a difficult thing to do without being taken advantage of.

      3. Falling Diphthong*

        When each of my kids was about 9, we went up to the bank and opened a child’s savings account for them. When they were about 16 (so driving and needing to get gas) at my prodding we went back to the bank and converted that account to a standard checking account. When they were over 18 each opened a separate savings account that I’m not on.

        OP, if my chill surfer dude of a 9 year old could put in the effort to open a bank account, and your third-of-the-business partner can’t… I absolutely believe you that he’s not a financial shenanigans sort. The problem is that he’s not a financial anything sort.

        1. Clobberin' TIme*

          You don’t even have to go to the bank anymore! Sam could do this in half an hour online. Banks make it very easy now for you to give them your money.

      4. Worked in IT forever*

        And if it’s too much effort to set up a bank account, I can imagine even less motivation for something that’s more effort, like paying taxes or getting insurance.

      5. The OTHER Other*

        If Sam can’t be bothered to open a bank account, how likely is he to be doing all the many other things the finance guy of a business needs to do? Taxes? Paying the bills? Accounts receivable?

      6. L.H. Puttgrass*

        “This is a bad trait in the money guy” has my vote for understatement of the day.

        That the “money guy” doesn’t want to set up a separate bank account for the business is all we need to know about this person’s (un)suitability to be the “money guy.”

        1. My heart is a fish*

          100%. This is already doomed. The money guy being willing to do money guy things is an utter bare minimum to be able to function as a business.

  19. Language Lover*

    It has been two years. I think sunk cost fallacy applies here.

    You’ve spent 2 years doing the work of trying to get the business up and running while dragging 2 partners along who probably loved the idea of having their own business than the insane amount of work it is to run their own business.

    It’s scary to walk away because what if they decide to put in the work after you leave? They won’t.

    Either strike out on your own or take some time as an employee before trying on your own again.

    I really hope you have a lawyer.

    1. Booknerd*

      Yes, I’m sure deep down you know the answer. This is not good. I know you’ve invested a lot of time and money, but it’s not going to get better. Cut your losses and run.

    2. emmelemm*

      Having worked now for several small businesses where the founder was the owner was my boss, I’ve seen up close and personal what it takes to run a business. Which is why I know I probably don’t want to run my own business, ever. Lots of people love *the idea* of having their own business, but the reality is very different.

      1. My heart is a fish*

        Plus all the ones. I watched my dad run his own business for decades, and I’ve spent a fair chunk of my own career in variations on merchant services watching other small business owners run their businesses.

        The good ones put in an absolutely mindboggling amount of work, and the bad ones create absolutely mindboggling messes.

      2. Migraine Month*

        I worked for one of those, and it made giant faceless corporations look good by comparison. I had to threaten small claims court to get my back pay and I never got my W-2 (and have zero confidence withholdings were done correctly, or at all).

        Being an entrepreneur isn’t for everyone; it certainly isn’t for me.

  20. Rainy*

    OP, this business has already failed.

    Get your money out, wrap up your involvement, and get out, formally. If this is something you want to do for yourself, in your spare time around your other work, set up your own consulting (or whatever this is) company. Make an LLC, get an accountant, do the work you were already doing, but keep 100% of the money.

    1. Sloanicota*

      When I started my freelance “business” I had a list of metrics I had to hit in my first year, second year, and third year; if I didn’t hit those metrics, I knew I had to exit and go back to working FT. This was my version of a business plan, and it kept me honest. It doesn’t sound like OP can accept this business being non-profitable for three years or more; some ideas you come flying out of the gate with clients and people eager to pay you money for what you do – *that* is the kind of business you need when you and your partners are depending on the income from the business to live. How is the growth, OP – is it approaching exponential in terms of clients/contracts/income, or is it struggling along over time? If not, it’s possible there’s an opportunity cost to staying with this effort when you could be doing something far more lucrative.

      1. RebelwithMouseyHair*

        Fellow free-lancer here, no need to put business in inverted commas. Just because it’s only you doesn’t make it a proper business!

    2. Code Monkey, the SQL*

      Yes, this.

      I’m so sorry OP. But you are looking for Magic Words to make your partners contribute in a meaningful way, but what you need is an exit strategy.

      They are content to make supportive noises and draw paychecks (in one case, from his own personal account) while you wear yourself to rags trying to keep this sandcastle from succumbing to the tide. Take your pail, take your shovel, withdraw your third (hey sam’s wife has access to the account too, if he won’t write the check (notice how bad that is?)), and go home before your efforts fall further apart.

    3. MCMonkeyBean*

      Yes, seriously, I feel like I could stop reading the letter after “the person in charge of money is refusing to set up a bank account.” Like I’m sorry, but that is literally the end of your business. I understand you aren’t afraid of him *stealing* your money and I totally get that, but that doesn’t matter when he has already demonstrated a complete inability to handle the first most basic task in this extremely important job function. Why would you want to be in business with this person? You are burnt out, they aren’t doing their job… I say stick with your day job.

  21. Not Today Josephine*

    The tax ramifications of this situation are mind boggling.

    What kind of business is this? An LLC? A Partnership? A corporation? Or are you each just reporting your share of the net distributable income on a Schedule C? Any way you slice it, one of the principals having the money in their own personal bank account is a terrible idea.

    You need to speak with an attorney, accountant, tax attorney, or someone that can help you sort this mess ASAP.

    1. NW Mossy*

      This is a situation where the cost of professional advice for getting out with some part of your skin left will be worth every penny you pay and more. Trying to get out without that help will take longer, cost more, and be much more difficult on every level.

      Ideally, Sam and James would each have their own professional advisors to support them in the dissolution of the business and cooperate with you in that effort. But everything you’ve told us about these two strongly suggests that this won’t happen, so don’t wait for it to. Get your own counsel and start extracting yourself from this, with an eye to preserving what you can of your own interests.

      And because it’ll come up: get yourself a script for how you’ll talk about the dissolution to outside parties. Keep it simple and direct. “Unfortunately, we weren’t able to make a go of it, so we decided to shut it down. It’s a bummer, but it was the right decision under the circumstances.”

  22. Dust Bunny*

    You have an idea, not a business. Literally none of this is working.

    I know you swear that Sam won’t mismanage the money but he already is, though inaction if not through outright dishonesty. Failure to separate this from his own money after two years and a dozen “reminders” is not at all how this is supposed to work, and he is at best not at all invested in getting this venture off the ground.

    You’re not going to see whatever money he owes you. Get out and either do this on your own or just work for somebody else unless and until you can find reliable partners, because these guys aren’t really in this.

  23. Ama*

    I’m so sorry OP but your friends don’t seem to be as invested in making this business succeed as you are, and for that reason this is probably never going to work. I have not been in this situation when money has been involved, but I have been in a couple of high profile volunteer projects with friends where they lost interest as time went on and I found myself doing more and more to make sure things kept running.

    In both instances I finally said a version of “I can’t commit this much time to this anymore, I can still do x, but someone else is going to have to take over y, and z, if no one can I think we’ll have to shut down.” And in both instances, the whole project ended up shutting down because it turned out no one wanted to be the first one to admit they didn’t want to keep going, and as soon as I said “I can’t do this,” everyone started chiming in admitting they didn’t have time any more either.

    Have a similar conversation with your partners, OP, sooner rather than later so there’s time to untangle everything.

    1. ecnaseener*

      Yes, and what’s so crucial about your script is there is no Option C — there’s no scenario where you keep doing what you’re doing, Y and Z will come off your plate one way or the other. LW needs to get very clear on that if they want to try this, because it sounds like James at least will try to push for Option C.

  24. The OG Sleepless*

    OP, my husband did this nearly 30 years ago. One of his partners was a pretty good individual contributor but just wasn’t cut out to be and owner. The other was, well, just a loser. The next 7 or 8 years were a long, hard exercise in frustration that cost us a ton of money. I know it’s less scary to start a new business as a joint venture with friends, but what’s happening to you is incredibly common. Cut your losses now. (As an aside, I’m not a finance person in any way, but the IRS will have a lot of opinions about keeping business money in one of the partners’ personal checking account.)

  25. NerdyKris*

    There’s a bigger problem than James embezzling, and it’s that by comingling funds like that, he’s creating a whole bunch of risks. What if a large payment comes out of that joint account and wipes out the company’s funds? Or in the reverse and wipes out James’ savings? What about tax implications? If the company or James as an individual gets sued, comingling assets like that means BOTH entities assets are at risk. If the company fails and needs to go bankrupt, James’ assets are going to be included as part of the corporation’s assets.

    This is dangerous in both directions.

  26. Eldritch Office Worker*

    I want you to imagine you go on Shark Tank, lay out this business, and what you think the investors would say to you.

    It doesn’t matter if you aren’t an investible business or looking for outside funding or if it’s not the kind of business that would be on Shark Tank. I just want you to imagine explaining and defending this business to business experts. And how it would sound.

    I think this is a useful exercise because can you really imagine looking those people in the face and saying “we don’t have a business account but I’m not worried because Sam is trustworthy”. Or “my partners aren’t pulling their weight but own 66% of my company”. I think just running these things through the filter of defending them under a spotlight to people who will evaluate the legitimacy of your business might help with perspective.

    This is really, really alarming. Please get out before it gets worse. You say you’re worried about them leaving – but they should be worried about you leaving, and you should.

  27. Atalanta0jess*

    You cannot run a business with someone who won’t set up the bank account. This fellow won’t do this one, single, fundamental thing that is an essential piece of structure for the business, and of accountability to his colleagues. He’s supposed to be managing the money? He is showing you that he will not.

    Get out.

    1. DyneinWalking*

      His idea of managing money appears to be being in charge of the account that the business money flows through, not actually managing that money.

      Food for thought: OP could open a bank account in favor of a cat and appoint said cat as money manager of the business and it would actually make things easier. Exactly as much money managing work would get done and there wouldn’t be all that trouble with figuring out how much of that money is personal assets and how much is business money.

      1. münchner kindl*

        A cat would be better for OP’s mental health: they can pet the cat instead of trying to get Sam working.

        Love the idea of a cat as account owner!

  28. Ampersand*

    I notice you said you did little to no work throughout the winter due to your other job, I wonder if your partners felt the same frustration you are feeling now and see this summer as their chance to let you pick up their slack? A good partnership is about equity not equality. You certainly appreciated (I assume) still being paid while you weren’t working on the business, what is the reason to not extend the same grace now? Certainly there are some issues in this partnership, but one of the main ones seems to be you are three individuals and not one team.

    1. EPLawyer*

      They weren’t pulling their weight before she didn’t do any work over the winter. This has been going for TWO years where she does the work and the so called partners collect their share of the money. She has raised the issue of a bank account TWELVE TIMES. I doubt that was just since this winter.

      This winter was her being burned out AFTER doing all the work. The guys aren’t getting a break now. They had their break all along.

    2. Pengy*

      I wondered that too, and feel like a lot of other commenters are missing that point – but the fundamentals remain the same, this isn’t functional.

    3. PB Bunny Watson*

      I had the same thought and was looking to see if anyone commented on that slice of the letter. It made me wonder a little about the other two’s side of the argument… but also, this is a terrible setup either way.

    4. RebelwithMouseyHair*

      Yes, that occurred to me too as I was reading. However, the whole thing about the funds in Sam’s own account and the way Sam and James are brushing OP off now makes that one little point pretty moot.

  29. Falling Diphthong*

    OP: Sam, who is unofficially in charge of the money, is not taking it seriously enough: he has failed to set up a bank account.

    Me: *blurgle*

    OP, this is such a huge thing–you have put in charge of the money a person who isn’t immensely prissy about every penny and is instead just super chill and won’t do anything until someone rescues him. (I guess this looks like you or James open an account in the business’s name, and his wife transfers over all “your” money that is sitting in her account?)

    If you go with the “redistribute pay based on work” model, you shouldn’t frame it as a “coup.” You should frame it as “What changes to the current business model would make you willing to stay?” Because dissolving the partnership is looking like the smartest move.

    1. Eldritch Office Worker*

      Also you CANNOT have someone “unofficially” in charge of money. You cannot. That is a specific job and you will DIE if it’s not assigned and carried through.

    2. mlem*

      Seriously. I cannot understand how LW thinks (or has been convinced to think) that laying out responsibilities and compensation for them is a “coup”.

    3. OP*

      Hi, I just wanted to thank you for this comment. All of them have been really great and helpful!! But that framing helps a lot. I guess it feels personal since we had this big emotional quitting moment together, but this really helped me write out a script that takes out emotion.

      1. BubbleTea*

        I have been listening to a podcast called Stacking the Bricks lately. It’s to help people who are setting up a product-based business, although it applies to service businesses too.

        One of the episodes I found most interesting was exploring the partnership between the two business owners, who are both individually partners in other businesses too.

        Their main point on which they adamantly agreed was that you cannot have an equal partnership where everyone gets equal say on everything. Someone has to be in charge.

        They also talked about times that one of them wasn’t contributing as much, and how they made that work.

        The whole series is super useful but that specific episode (episode 24) was very relevant to this situation.

      2. Grumpy Elder Millennial*

        OP, it’s totally natural to have emotions about all of this. It sounds like the whole situation is very stressful, there are lots of interpersonal dynamics involved, and this is something you’re really invested in. You’re totally right to want to make sure your decisions and communication aren’t driven by emotion – this is very smart! Just wanted to encourage yourself to feel the things you’re feeling because bottling them up isn’t great, either.

  30. bamcheeks*

    no no no no no no no no no no no no no no

    James relies on this money and would not be happy or okay with getting less

    Unless you’re James, of course, in which case this situation seems pretty nice!

    1. Cedrus Libani*

      Indeed. Can I sign up to be a partner too? I won’t do any work, but at least they’ll know in advance, so they won’t have to keep checking in. I would be happy to rely on that money, or at least I’d be happy to complain about how hard it is to be upper-middle-class and broke whenever I’m in contact with the other partners.

  31. anonymous73*

    If you’re unwilling to let things slide, nothing will ever change. You’re enabling them to slack on their agreed duties. And based on you letter, I’m not convinced that anything will change if you do let things slide. I would cut your losses and run.

    1. Eldritch Office Worker*

      Also OP says they aren’t letting things slide but…*gestures at bank account*

      1. DuskPunkZebra*

        Yeah, OP is letting the WRONG things slide. They’re all too willing to let the business funds languish (hopefully) in someone’s personal checking account but is a stickler for other assignments? The priorities here are scrambled.

        I keep scrolling hoping to see OP here…

        1. Eldritch Office Worker*

          I would love to hear from OP or get an update! But I also understand this might be an overwhelming comment section. If you read this, OP, we really do want the best outcome possible for you here.

  32. CheesePlease*

    Very curious about how diligently Sam is able to control finances (track expenses, comply with taxes etc) if he manages the business out of his own personal account. Given his inaction on establishing a separate account – I don’t put a lot of faith in this.

    1. Snarky McSnarkerson*

      That’s exactly what I thought. If they are getting paid every month, how is he tracking those transactions? How does he know how much of that money is his?

      Would LOVE an update on this letter!

  33. Nanani*

    OP, I’m sorry to say but despite all your certainty that Sam wouldn’t steal the money – Sam has already stolen the money.
    It’s in his private bank account that isn’t linked to the business so if he decides to move it to another personal account or move abroad or something, you are SOL.

    You may want to bail and stat your own independent business, or, if it makes sense in your field go freelance to do the actual work you’re good at without worrying about the Running a Business bits.

  34. SJ (they/them)*

    Everyone’s points are very good here, my one addition is: get your share of the money into your control BEFORE you tell them you’re leaving the business. Give whatever excuse you need to – since there’s no business account, you’re going to keep your share in your own personal account and they can keep theirs wherever, something something. Have the money that is yours in your sole control, and THEN peace out.

    Good luck OP, may the wind be at your back as you escape this situation!

    1. RC+Rascal*

      Excellent advice. Not sure it will actually be possible; my guess is the money is already gone. The reaction to the attempt to recover OP’s portion will be very telling.

      1. Rainy*


        Unfortunately, there are people who, when money comes their way, even if they are supposed to hold it, will just spend it. OP and her friends ended up putting the money for their joint venture in the hands of such a person.

      2. L.H. Puttgrass*

        Yup. If I were OP, I’d assume the money is gone forever. Priority 1: get out of the “partnership” (if it’s even legally structured as one). If OP can get any of their money back in the process, great—but don’t bet the house on it.

    2. Bilateralrope*

      I’d suggest using the excuse of taking over the money duties because Sam isn’t handling them. Create the business account. Make it look like bailing Sam out like has happened before.

      Then the letter writer announces that they want out. Give the other two the choice between closing the business or taking over the LWs share.

    3. Kay*

      I would say – consult a lawyer and accountant before doing anything (and for obvious reasons not disclose that until OP is ready to take whatever action they decide to take – hint, extraction!).

  35. Emotional Spock*

    -Make that difficult phone call/Zoom
    -Say you won’t be able to go on like this and that you are out.
    -Ask for your share back (but expect to never see it)
    -Consider some sort of dissolution agreement to wash your hands of this “enterprise”

  36. Double A*

    The first step I would take is to set up an appointment with Sam to go to a bank, together, and set up a business account. Invite James, but if he doesn’t make it, that’s his problem. Get this on the calendar ASAP.

    I know you say you don’t want to handle finances, but you have to get that money into an account that you can access.

    Then, once you have a business account and access to the money, you start winding this down. Formally. Don’t tell them this before you set up the account. But you need to get this in some kind of shape where you can put it to bed.

    1. Clobberin' TIme*

      The OP doesn’t even have to rope Sam and James into this. If there is business paperwork, OP can very likely go online, right now, and set up the account for the business by putting in a nominal amount of money and uploading PDFs of the business documents like the d/b/a, business license, or articles of incorporation. They can add Sam and James’ names to the account afterward. Then it’s a simple matter of having Sam or his wife write a check to that account.

      ….there IS business paperwork showing that the business exists as an entity, right? Right?

      1. PinkCandyfloss*

        I had assumed there is because they mentioned applying for grants, so … I really hope there is something.

        1. Kay*

          But grants require you to provide financials (at least any I’ve dealt with) – and if they don’t even have a bank account I’m questioning whether they have any of this.

  37. LilPinkSock*

    Sam handles the money, which means putting it into his family’s personal checking account.

    Is there a different way to describe this, other than mismanagement? LW, there’s no reason why only one partner out of three is the only one allowed to access the money–especially if he’s not doing much to bring it in.

    Go with Sam to the bank and set up the account together.

      1. Kevin Sours*

        Absent a corporate entity, which is almost certainly the situation, I don’t think there is any *legal* impropriety. However comingling funds like that is really bad practice for a sole proprietorship let alone a partnership. It’s a red flag composed of smaller red flags.

        1. Eldritch Office Worker*

          If they are auditable at all it would be mismangement to the IRS – but you make a good point that they likely have not gone through the steps to get that far.

  38. SomebodyElse*

    I’ll start with my advice for staying in the partnership… and then move on to getting out. It sounds like you need both right now :)

    1. Make a list of the things you think need to change in order to keep the business going
    -Real financials including a business account, reporting, auditing (either self or 3rd party) and taxes
    -Legal roles
    -Clear roles, responsibilities, and deliverables
    2. Make a list of things that signal milestones for your continued involvement (see also the getting out part) This might include the following.
    -profitability of business by x date to continue involvement
    -profitability to sustain you quitting your job
    -readiness for acquisition (if this is a goal)
    3. A good sit down with your partners to understand what everyone wants out of this business. You’ll never be successful if your goals are different. If Sam is looking to do this for fun and a little extra side money, James wants to build it up to sell for profit, and you are looking for long term stability you can see where the problems are going to come from.

    Now related to number 2, you need to set up some go/no go points with this business for yourself. What are the triggers for you to walk away. I think most successful small business owners have an exit plan. You should have a personal one that removes you from the business, and a formal one with your partners for when it makes sense to dissolve or sell the business.

    Good luck!

    1. Grumpy Elder Millennial*

      I had a similar realization after playing in a band for a few years. It started as a regular jam group and kinda morphed into doing the odd gig. But we never had a real conversation about what we were doing. And I realized that we were never clear on how good we wanted to be and how hard we were willing to work to get there. So we’d be getting together to play – possibly with a gig coming up – and some of us were treating it like a jam session and some more like a rehearsal. OK, it was mostly me wanting it to be more like a rehearsal. I’ve spent a lot of time in the classical world (as had one other band member), and my norm was that if some bits aren’t quite right, you go back and work on them until they are right. Then you probably do it a couple more times to make sure you’re solid. One other band member would get visibly annoyed when I would want to repeat a section a few times to resolve something that didn’t sound right. He wanted to just play a song through once and move on to the next

      The thing is, none of us were “wrong.” There is no “wrong” way to be in a band; bands are allowed to decide they want to have fun and things don’t have to be perfect (or even approaching perfect) at gigs. Bands are allowed to do no gigs at all. Bands are also allowed to sweat the small stuff and put in the work to sound as good as possible. The issue was that we never talked about it. And by the time I realized what the problem was, things were pretty entrenched. Anyway, one of the band members moved away and the whole thing just kinda collapsed from there. Nothing dramatic, just a loss of momentum.

      But from that, I learned the lesson about how important it is to talk about things at the start, rather than assuming that everyone has the same vision.

      1. Grumpy Elder Millennial*

        To be extra clear, the other band members were between the two of us. They were open to doing some rehearsal-like stuff, but less into it than me. So I was very mindful of how many times I asked to run the same section over. Sometimes I wanted a couple more attempts, but didn’t think that the others would be into it, so I’d just let it go.

        Didn’t help that the one who’d be annoyed by rehearsing also seemed to consider himself as a front-man. He and the other main lead singer would also be the dominant personalities in the jams.

  39. Becky S.*

    You have the ability to run your own business, but you have to get a LOT smarter about people first.

  40. irene adler*

    Another way to view the listing of the tasks each persons does would be to size up what skills the OP would need to hire for once divested of these two “partners”.

    Annnd, given Sam’s reluctance to keep the business funds in a business account, do we know that the funds still exist? In full? Maybe it’s time to schedule an independent audit of all accounts where the business funds are located. Yeah, that includes Sam’s personal accounts. He won’t like that.

  41. idwtpaun*

    OP, you have a dream of what this venture could have been and the reality of what it is. You’re trying to find a way to turn the reality into the dram, but it’s not happening and it’s not going to happen. You tried a business venture and it didn’t work out. That’s ok! Not every venture does!

    If your founding business document has an exit/buyout clause, exercise it. If it does not, hope that James and Sam are reasonable people who will buy out your share at a price you can all agree on. Either way, go. This is a waste of your time, don’t sink any more into it.

    1. Eldritch Office Worker*

      With everything else laid out I really hope there IS a founding business document

  42. Popinki(she/her)*

    I’ve heard business relationships compared to romatic relationships. You can’t change other people. You have to take them as they are, not how you want them to be. If all parties don’t want the same thing, it’s going to lead to resentment and frustration. If one wants to make it work and the other(s) don’t, it ain’t gonna work.

    Taking you at your word that Sam won’t steal the money, he’s proved himself to be either lazy, sneaky, or stubborn by not putting the business money in a dedicated account. If it’s an interest-bearing account, that’s free money going into his pocket from your hard work. What if he and his wife decide to split up and their assets are divided? How do you prove what’s business money and their money?

    You say James depends on the income from this business, but he’s sitting back collecting the goods while you’re breaking your back trying to keep things afloat instead of pitching in and helping.

    It’s clear that neither of them care as much as you do. I agree with the other who are saying cut and run, before you burn out.

    1. No Longer Gig-less Data Analyst*

      Yep, I’ve always said that you have to be happy in a relationship with a person as they are now, not the potential of who they could be one day. You see it on Reddit all the time – “Everything would be perfect if they would just chip in on the bills, kids and housework instead of gaming 16 hours a day!” “If they would just let me hang out with my friends occasionally and stop checking my phone without permission all the time, our marriage could work!” Honey, the call is coming from inside the house, and you need to RUN like yesterday.

      The same is true with going into business with someone – you all need to be on the same page, with equal respect, responsibility and passion or it’s doomed from the start. OP needs a lawyer and to get himself out of this business “partnership” stat.

    2. El l*

      Oh, and by the way – James is getting all the credit for this, too, not OP? No wonder he doesn’t want to help – he’s got every incentive to keep things just the way they are.

      Why Sam is guilty of gross negligence I won’t speculate on.

      Either way, OP, you gotta help yourself, and get out.

  43. lizesq*

    The corporate attorney in me in SCREAMING. OP, this could be a law school exam hypo with all of the legal and tax issues you’re apparently just fine with allowing. Please get the business a good attorney to help you restructure if you’re committed to staying in this venture.

    1. L.H. Puttgrass*

      “[T]his could be a law school exam hypo with all of the legal and tax issues you’re apparently just fine with allowing.”

      I nearly posted the same thing. It’s like the first part of the exam where it lists all the mistakes people made, just before the section describing how it all went sideways. OP is in the stage where things haven’t gone sideways…yet. But anyone who’s taken a law school exam can recognize from this fact pattern that issue spotting is imminent.

    2. J*

      I’m not a lawyer but I’ve worked in small business law long enough to know how bad this scenario is. I have so many questions about the legal structure, funding and payment. So so so many questions that the OP doesn’t even seem to know to ask. This needs an attorney stat. And OP, remember that an attorney works for who engages them so if you want guidance for your specific situation, you need to engage them individually. Another attorney may be needed to guide the entity…if one exists. And it’s likely these will need to be separate attorneys (and separate firms) because of conflict issues. You likely need both at this point.

    1. hit da bricks*

      I came here to say the exact words “hit da bricks.” OP should spend the time opening a bank account and if they can get their share of the money of the money from there, then after hiring legal advice to protect themself LEAVE.

  44. anonNY*

    For someone who’s highly anxious and avoidant about money, this wouldn’t be surprising (although it’s infuriating–don’t ask me how I know about this). He really may not be doing anything shady with the money. But it’s still unacceptable and LW needs to find her way out of this ASAP!

    1. All The Words*

      Holding the money personally, in his family’s account IS something shady with it.

  45. irene adler*

    Another use for the listing of all the tasks each person performs could be to lay out what skills OP would need to hire for should OP decide to continue the business without the two “partners”.

    Don’t businesses usually have an outside audit performed on their books at regular intervals? Maybe it’s time for this to occur with Sam’s bookkeeping. Yeah, that would include an audit of his personal accounts- and all accounts where the business funds have been deposited. Painful for Sam. Maybe a lesson too?

  46. Naomi*

    OP, Captain Awkward said something recently about how boundaries aren’t about controlling other people’s behavior (which is impossible); they’re about your own actions and what you do to protect yourself. I think you need to lay out some boundaries here. Only you can decide on those, but they might be things like “I will not do task X until my partners do task Y,” or “I will not do any more work until our money is in a business account,” or “If my partners don’t agree to a more equitable division of funds/ labor, I will leave the business.” Whether or not you tell Sam and James these things in so many words, you need to know in your own mind what you aren’t willing to put up with, and what you will do if their behavior doesn’t change.

  47. Generic Name*

    Honestly, this letter reads like a post on the “Am I the Asshole?” subreddit where a person in a relationship writes in and says, “My partner screams at me and tells me I’m an awful person. Am I the asshole if I sometimes cry when I’m getting yelled at and treated badly, and oh by the way how do I change myself and work harder to stay in this relationship and make my partner happy?” and all the responses are, “Omigosh, get out now honey”. You are already doing all the work and getting a third of the gains, and you’re asking how you can do more work so your partners will suddenly start doing their fair share. I hate to break it to you, the best-written job descriptions in the world will not make your business partners suddenly step up and act like business partners or at the very least responsible employees. Talk to a lawyer about how to disentangle yourself from this mess and leave now.

      1. Morticia(she/her)*

        I must respectfully disagree. Bees are useful, industrious, and needed. This is more like ticks.

  48. English Rose*

    OP I echo everything everyone else has said. Consult a lawyer and probably an accountant, get out as fast as you can and start your own business which will be a brilliant success.

    And come back to us with an update, I so badly want to know how this turns out!

    1. Generic Name*

      Yes! OP, you don’t kneed those clowns. You’re already running the business on your own; they’re dead weight (or worse!). I wouldn’t be surprised if you discover that you do great when you’re on your own and you don’t need a day job to make ends meet. I second the request of an update. You can do it!

      1. Not Your Admin Ass(t)*

        OP, you don’t kneed those clowns.

        …Even if those clowns deserve to be kneed!

        (Sorry! Couldn’t resist a bad pun)

        1. BubbleTea*

          OP believes that if she kneads hard enough, they’ll rise to the occasion, but unfortunately those guys are kosher for passover. Ain’t no leavening here.

  49. Critical Rolls*

    Before I read through the comments… business with friends is always, always risky business. One of the ways to mitigate that is to have as much structure as possible set up *in advance.* I would never, ever rent a room to friend without a contract, because it makes expectations clear and protects us both. And that’s a darn sight less significant than going into a business that you hope will develop into something that can support you full time.

    Doing business with friends makes contracts less effective, because we are, and are expected to be, less willing to enforce them based on our relationships. But they still help a lot.

  50. I edit everything*

    OP, I don’t think anyone has said this yet, but:

    James’s personal financial situation is not your responsibility.

    Things that are your responsibility:
    Your duties for the business.
    Your personal financial situation.
    Your health, mental and physical.
    Your relationships.

    If James can’t get along without his share of the money, then he’s the one who needs to do the work.

    1. QuestionableMorals*

      Also true, unless they were actively using their industry status to bring into the business–but it doesn’t seem like thats happening at all and definitely not at the level for equitable pay (according to letter)

    2. Not a mouse*

      True. Also, if James is the one with the valuable reputation in this field, then he’ll be fine. He has more options than you do. So stop worrying more about his survival than he is.

      1. emmelemm*

        Everybody’s done a good job of laying out all the potential problems here and the answer is, of course, get out! Just want to reiterate one point:

        If James is the more “famous” (well-known) one, he can generate clientele on his own, and then DO THE WORK. To earn that money he’s “dependent” on. Don’t worry about James’ financial wellbeing over your sanity!

  51. Mouse*

    I am very curious about the gender, age, and other demographic dynamics in place here.

    1. Kammy6707*

      Yes! I get the impression OP may be a woman…the “things need done and don’t happen unless I do them” is a familiar mantra for many women!

      1. Nanani*

        I had similar thoughts!

        Both “it only happens when she does it” and “he’ll do it but I have to carry the mental load and endlessly remind him” are staples of relationship columns.

      2. Eldritch Office Worker*

        I read OP as a woman for that reason as well, but I don’t think it changes the advice. It does add a layer to my aggravation with the situation but I think that’s an aside.

    2. bamcheeks*

      I thought that too— but that said, it’s pure curiosity and doesn’t change any of the advice.

      1. DuskPunkZebra*

        Yeah, the advice is the same, plus “consider whether you want to be in a business relationship with this kind of sexism” thrown in. It’s bad enough that it shows up at home, but miss me with it showing up at work, too.

        Get a lawyer, get an accountant, and then figure out how to get out.

  52. HufferWare*

    I literally gasped when I got to the point where the “money guy” hasn’t even opened a bank account after 2 years of this “business”.

    Also this line: “From the beginning I asked for my role to not include financial responsibility because I’m honestly not comfortable with money and would prefer to focus on other operations”

    You absolutely MUST address your relationship with money before starting a business. Your laissez-faire approach is how people lose all their savings to charlatans after spending years building their dream.

    This group you’ve assembled will never make a successful business. Cut your losses, get back your investment, and spend more time preparing, planning, and finding the right people to do this with.

    1. Eldritch Office Worker*

      All of this. I’d also argue “putting the systems in place to handle the money” even if you’re not handling the money personally is ABSOLUTELY an operations concern. OP is not blameless here.

      1. Antilles*

        If you’re co-owner of a small business, literally *everything* about the business is your concern. There’s no such thing as “my role does not include X” because at the end of the day, it’s still your responsibility. You don’t have to do everything personally, but you do have to be sufficiently aware of everything that’s happening – both so that you understand where things are at and also so that you can make good decisions.

        1. General von Klinkerhoffen*

          I get to say, “I don’t do money, ” because I have an admin role and am not a director. OP doesn’t have that luxury, which means either she needs to suck it up and learn, or the business needs to have an accountant on staff.

    2. RebelwithMouseyHair*

      ah yes this is crucial.
      For years, I languished at a company that didn’t appreciate my full value, because I preferred to just do my job and get my salary. I hate dealing with money and bills and finance!
      Turns out that doing the same job as a freelancer earns me nearly twice as much money in less time, with the freedom to choose my assignments and to work when I feel like it. As for the dreaded finance: doing my bills takes me a measly five minutes at the end of each job, five to ten jobs a month, and I don’t hate it because it’s gratifying to see how much money I’m earning. Then filing/paying my taxes takes half an hour a month and chasing up unpaid bills takes even less time because I only give bad payers one chance. So all in all the finances take less than a day a month, in return for the freedom to do what I want when I want and never have to beg for a day off, or to WFH when the cable man comes, or worry about unmasked colleagues and all the many other problems that having a boss might cause.

      OP if you want to have your own business, you do need to get familiar with the finances, because whatever your role, you need to know exactly what the situation is. You don’t want to be blind-sided by a bankruptcy after all! Maybe you need an accountant/business consultant who can walk you through the stuff you really need to keep on top of, then strike out on your own.

  53. calvin blick*

    It sounds like OP wasn’t doing anything for the business at all as recently as this winter, so this is pretty early to be getting burned out. Sounds like none of these guys have thought this through. Sam is already mismanaging the money by keeping it in his personal checking account (which someone else has access to!). If James has the industry knowledge and lends the company credibility, it might not be that crazy for him to get an equal share for less work. But overall it seems amazing the company has lasted as long as it has.

  54. WellRed*

    If you can’t afford to quit your job to start a business without still needing to still work full time elsewhere, you are not ready to start a biz. Get a lawyer to help you extract yourself from this mess before you want up with an IRS audit or some other ghastly result of this banking arrangement.

  55. QuestionableMorals*

    How would you recommend OP leave the business–is the business in enough of a place where you could be bought out . That way you could either start your own, or get as close to properly compensated as possible?

    1. V*

      That’s a good question. OP might want to think about the cost/benefit of getting a lawyer or mediator to help the three of them come to a formal agreement about how to wrap it up.

      1. Kevin Sours*

        There is no think about. The best time to get a lawyer was when this started. The second best time is now. OP needs to get a handle on their exposure because “joint and several liability” is a cast iron bitch. Especially when the unofficial CFO is taking a “What? Me worry” approach to accounting.

    2. münchner kindl*

      I would recommend:

      OP asks Sam for their share 1/3 of the money in the bank account

      OP tells both that they (she?) is leaving

      Sam and James can earn the consequences of their inaction.

      OP can take a break to recover, and then think whether they want their own business with all the work. Then OP can do a full business plan before starting the work. Or OP can keep doing one normal job that brings in money.

  56. V*

    OP, first let me be the 200th person to say GET OUT GET OUT GET OUT of this arrangement.

    Once you’ve done that… for next time I want you to know that you can contract with a professional, part-time full charge bookkeeper or even a part-time Chief Financial Officer, who will take care of the legal and fiscal requirements of starting and running your business. You don’t have to be a “money person” yourself, but paying a professional to be your part-time money person is a scalable solution. And cheaper than letting a “friend” take advantage of you.

  57. Tirving*

    To parrot every other commenter -You need to get out now. My fear though, is that when you (the one carrying the load that generates the income) announce you want to disolve the partnership and be paid out, your partners will balk and you’ll set off a s**t show . You’ll find either there is no money in Sam’s account or they’ll refuse to pay you. With no formal accounting process or even bank statements to prove you have a right to this money, you’ll be hooped. Cut your losses.

    1. Not a mouse*

      It might be a bad scene, but what I think is more likely is that when OP says “I want out,” the other two will say oh, we didn’t realize. We promise to do better. And they will coax OP into continuing. And nothing will change, because if they were capable of changing, it would have happened by now.

      This is a good time for that question from Captain Awkward. If nothing changed, how long would you be willing to continue? Another year? Two? Ten? Because that’s probably what you’re looking at, here: No change. At least from your partners. The one likely change if you stay is that the whole thing eventually implodes spectacularly. Sorry, OP, I know this sucks.

  58. Kammy6707*

    Wow. When I was in college, I lived with 5 other girls in an off-campus house. I was the most responsible, and didn’t want to get stuck with all the money management regarding utility bills – I knew I’d end up paying things from my own account and be shorted when someone “forgot” to give me a check (especially since the other girls did not work and the money came from their parents).

    So myself and another roommate went to the bank and set up a shared account for utility bills to be paid from. All the roommates gave a check to either myself or the other roommate with their estimated “share” for the semester (I think we all contributed like $100 at the start of the semester and then I did the math on what we needed as the amount went down). All the bills were then paid from that shared account that two of us could access.

    So what I’m saying is if myself and my other roommates could figure this out at the age of 19/20 – I find it really suspicious that your friend can’t manage to set up an account. Cut your losses and run.

    1. whistle*

      Yes, great example! I went on a long road trip with two friends when we were all 19, and we used an envelope to collect equal amounts of cash from each of us and pay for joint things like gas and camping sites from the envelope (this was before venmo, and none of us had a credit card). As the money ran low, we would each throw in another $20 or whatever (ah, when gas was under $1/gallon).

      I just can’t even with a “business” that doesn’t have a bank account after 2 years.

  59. Trawna*

    Triggering! I was married to a man like LW’s business non-partners. People who are content to let you carry the load, are people to be divorced from. Get out, sacrifice the money if you have to. It isn’t worth trying to fix what other people don’t think is broken because it works just fine as it is.

  60. shrinking violet*

    PLEASE, OP, we desperately need an update after you do whatever you decide to do (which should be get your money and run for the hills). But either way, update!

  61. kiki*

    Working for a company together is very different than owning and running a business together. It can be hard to tell if a good coworker will make a good co-founder before you actually start working together. I think you have two years of data at this point that running a business is not a good fit for these two.
    If you’re really depending on the extra income from this job, I might have one more conversation with them, laying it all on the table. If they are worth continuing to work with, they will not react poorly to an honest conversation. If neither of them see anything wrong with using a personal bank account instead of setting a business one up at the bank, you have to move on.

  62. Marzipan Shepherdess*

    LW, please go to the “Search this Site” box and Google “Laura and Miranda”…and then read the original letter and its updates. Those letters will tell you exactly what happens when Amateur Hour masquerading as a business depends on one competent, responsible employee who finally quits after being overloaded and underappreciated. Trust me, you do NOT want to end up as the “Miranda” in this debacle!

    Do your fledgling company have access to legal counsel? If so, please talk to THEM about the ramifications of having an employee’s personal bank account doubling as your company’s account. Once they pick themselves up off the floor upon hearing this, ask them for their advice as to what to do next. But don’t be surprised if they say “Polish your resume – you’re likely to need it very soon!”

  63. Forty Years in the Hole*

    Water under the bridge & well out to sea by now, but did anyone set aside the rose-coloured glasses and at least consider/take up a small business (management) course – readily available through most community colleges, or your local chamber of commerce? That opens so many doors: access to professional mentoring; developing a formal business plan (initial set up, 1-, 3-, and 5-yr etc); milestones/deliverables; learning market research etc; this is presented to the bank for a small business loan. This – plus all the above-mentioned – sets you up, if not for actual success, then at least provides a reality check. Not raining on OP’s parade but a huge % of small businesses tank in the first 2-5 yrs.

    I’ve not worked with grants for years (I’m not in US); they are a valid startup resource but not a given. You need more than just a well-written submission: a proven/robust plan, some stable track record, reliable/quantifiable metrics out to loosen those purse strings. And they need to be managed for accountability.
    OP: catch us up when you can. Good luck!
    (Retired Business Planner/analyst)

    1. Eldritch Office Worker*

      It may also have been a similar financial investment to have a consultant or attorney help set up the original structure. This whole thing could have been run better from the beginning.

      Also big yes to the grants. If you get them, that’s not the end. I don’t see the organization from this group to handle grant funds.

      1. red flags*

        Exactly. What good are the grants when they’re sitting in Sam’s personal checking account?

    2. Willis*

      I do a lot of work with govt grants in the US and good luck getting one without a company bank account!

    3. J*

      Yes, yes and yes. I have worked with small business founders who know their niche but not the business. They get a grant and then find out surprise! they can’t get the grant sent to them till they have a bank account and they can’t get a bank account until they have an entity formed. SCORE, the SBA, local libraries, local startup and small business networking, local colleges and chambers will all have guidance. One of the first questions I ask someone when they transition from hobby to business is “Who is your BAIL?” which stands for bank, accountant, insurance and lawyer. Because if you aren’t ready to answer that, you at least need to plan for that. A business plan is so important but every day I see qualified workers think they can skip that step and it nearly always plays out like this. I see a massive gap in accounting and legal, there’s clearly no bank, so I’m left questioning the entire foundation of your business including entity formation.

  64. BlueWolf*

    Is this actually set up as a formal business in any way shape or form? I am part of a “social club” of sorts. We have a board, but we previously had not been set up as any sort of legal entity. After some changes in board membership, some new members (lawyers and a CPA) on the board said we needed to formally incorporate, even just as a tax-exempt organization, and get everything above board to protect the board members from any liability. That meant also opening a (non-profit) business bank account. There were a lot of hoops to jump through. In order to open the account we had to provide our bylaws, meeting minutes, etc. to the bank to setup the business account and prove that the people assigned as the owners of the account had formal authority from the organization. We also had to incorporate with the state and register with the IRS as a tax exempt organization. My guess is that Sam hasn’t put in the effort because he either doesn’t know how, or he found out how much work it is and so he hasn’t bothered to put in the effort. This whole situation definitely sounds like it is not good for you, OP, and I would definitely recommend getting out as soon as possible.

    1. Sloanicota*

      To be fair I think there can actually be a greater burden on nonprofits, since they have to prove they shouldn’t have to pay taxes on any income. A simple business may not be as difficult to set up but your point is taken!! OP’s business should merit at least as much paperwork as a social club!

  65. wrack*

    OP, to be honest, I’m worried that you’re not looking hard enough at your own role in this dysfunction, either. You see all the red flags and you have been very clear about what your partners aren’t doing. But OP, there are important things you aren’t doing, as well. You are allowing these things to continue to happen and by doing so, you are equally as implicit as the two other partners for the mess your business has become. You cannot save a sinking rowboat with 3 people in it by being the only person trying to bail while the other two wring their hands and do other, non-bailing things.

    Whether the business is actually viable or not (which I am not convinced, tbh) the fact is the partnership has already failed long ago.

    You have been making a lot of excuses and taking on extra work rather than see the writing on the wall and extricate yourself.

    Others are telling you to leave and start your own business, but given how you’ve managed the one you’re currently in, maybe it’s time for a hard evaluation whether you really do want to be in business for yourself or whether you’re more comfortable/better off being an individual contributor in a larger organization where other people have to worry about the things you currently aren’t able to control.

    1. Eldritch Office Worker*

      I agree. As someone who specializes in operations I’m flinching a little bit at OP simultaneously saying they don’t let things slide but…letting so many things slide. Or having so many “if only” excuses. OP says they want to focus on operations but I’m not sure exactly what that means in this case because…these are operations. Defined roles. Systems. Accounts. And if you don’t have a handle on that concept running your own business is not going to go better next time.

    2. Sloanicota*

      I want to tell OP what someone told me when I was embroiled in a mess like this: “imagine a world, a few months down the line, where this is over and you’ve escaped. No more homework after regular work trying to keep this thing afloat. No more guilt or shame or obligation. These people can and the labor they are or aren’t doing can just be … not your problem any more.” It may take a few days of unpleasantness, but you can get there, OP! Wade through the unpleasantness of ending this thing and ride out some hurt feelings, and sooner than you think you’ll be able to say “not my circus, not my monkeys.”

        1. Serial Entrepreneur*

          OP, when I had to exit a business, I did it quickly and felt such a great sense of relief. The joy of no longer trying to be the one to fix everything was overwhelming. Moreover, I moved to to another business where my partner and I had an attorney lay out a corporate structure. We trust each other completely, having it all on paper means a functional business with no interpersonal stress.

  66. LadyByTheLake*

    Also, check with a lawyer, but you should be aware that if this is a general partnership (which is what it sounds like) you are fully responsible for the financial stuff (like making sure that taxes are paid etc) even if that was delegated to someone else. Failure to open a business bank account (which is very, very simple) is such a fundamental failure that you should be concerned about what else has fallen by the wayside that you might be liable for. A

    1. Forty Years in the Hole*

      Not unlike sharing tenancy with 2 other roommates: landlord doesn’t care how the rent is paid. If you’re name is on the lease and the other(s) bugger off, guess who’s stuck paying…? Good luck suing the other roomies for your share.
      And… if (when) this folds, what does that do to the credit scores, should OP go looking for a future loan (personal or business)? And OP’s reputation in the field/community? People will remember… more than just numbers at stake.

  67. Kevin Sours*

    This is one where I think the advice is fundamentally off the mark. In this situation the only advice I would give is: consult an attorney experienced in business organization and do what they tell you. Ignore everybody else.

    1. JessicaTate*

      I have to agree. There are so many questions that come up with this description of a “casual” business partnership… you need a lawyer. (And I know that sounds scary. You’re thinking, “Where do I find a lawyer? This is too much! We can work it out!” You can’t. Contact your local SBA chapter for a referral. You need legal advice.)

      The fact that the OP doesn’t include what type of partnership they have, legal agreements in place, how they’re reporting the money to the IRS, etc. makes me concerned that none of this is set up properly, and OP is in a world of problems the least of which is, “Sam doesn’t do his job.” (For instance… when your company gets paid, who do they write the check out to? To whom do they send a 1099? The money is in Sam’s account… how did it get there? You talk about each of you getting the same amount each month — so, Sam writes you a check? How are you individually and as a partnership reporting that income with the IRS?) If this is all handshake and under-the-table, you need a lawyer to figure out what your options are to get out / get straightened. (Hey, it may be super-easy if all of the financial liability is with Sam! But you need a lawyer to tell you that.)

      Even if you have all of the legalities of a partnership set up and just didn’t mention them (except for the bank account??) and are cool with the IRS… you will need that lawyer to help you dissolve or get out while protecting your interests. It’s not just the money, but if you’d still like to pursue this business on your own (as you seem to be the one doing the work), there can be big issues if you are in a legal partnership. I’ve watched several friends spend a lot of money to get out of a business partnership when they were invested in making the business a success, but the partner was… not. But because it’s a partnership, the only way to solve irreconcilable differences is with a legal dissolution that protects your interests in continuing the business.

      I cannot repeat it enough: Business partnerships are a marriage, and should be just as carefully considered, probably more. You are legally and financially binding yourself to this other person. You don’t just share income and expenses; you share the business idea, name, vision, decision-making, liability, etc. You have to come to agreements on everything. And when there are irreconcilable differences (like one partner mismanaging the money and refusing to change), your recourse is to get divorced. And divorce, especially if you care what you walk away with, is expensive.

      Good luck, OP. You can do this.

      1. münchner kindl*


        ” and Sam always swears that he’ll do better when called out … and then never does”

        struck me on re-reading. Sam is already dishonest in this one point: he swears, then breaks that word.

        I don’t know, but I also don’t care, whether it’s normal laziness or a mental health problem, but the result is OP can’t trust Sam’s word. At all.
        And Sam being untrustworthy about his words of course also extends to the money in his own bank account. OP can’t trust Sam’s word that the money is there because Sam breaks his word. Without feeling bad about it, because otherwise Sam would act.

        And as has been pointed out: if Sam did have a mental health problem that makes it difficult, he would hand off his money guy duties! After all, that’s what OP wants to do, too (finance stuff is not fun for lots of people, it’s understandable).
        Not handing over and not doing the work is … really not ok.

  68. Ann Lister’s Wife*

    The money thing alone is enough for me to cut and run. Demand a buyout and leave- this isn’t working for you, OP!

  69. MistOrMister*

    This sounds like a disaster overall but it’s the money part that really gets me. I would have insisted on a separate bank account with all three owners on it from the beginning. I don’t think I would be willing to continue in a business where one person kept the money in a joint account with this spouse. OP, even if you trust Sam implicitly (there are very, VERY few people you should trust no matter what with your money) do you have the same level of trust for his wife? There are so many things that could go wrong here, financially. By allowing Sam to keep the money in his personal account, I don’t know what rights you will have to it if the situation were to arise where Sam was not willing to give you your share. I understand not wanting to take on the money aspect on top of other things, but you can’t continue in this ditection.

    1. New Jack Karyn*

      I mean, I trust Sam’s wife more than I trust Sam at this point. She’s been pushing for him to get that business account; she has some inkling of the risks and liabilities he’s courting with this nonsense.

      1. Eldritch Office Worker*

        Because I’m suspicious by nature – do we KNOW the wife pushed Sam or did the wife just tell OP she pushed Sam?

        1. New Jack Karyn*

          It also says Sam’s wife asked OP to push him. If she’s playing a long con, she’s something out of a Patricia Highsmith novel.

    2. Marthooh*

      Even if you can trust Sam’s wife and Sam’s character, you cannot trust Sam’s good judgment, because he doesn’t have any.

    3. cmcinnyc*

      If I was Sam’s wife I’d be flipping out. I would NOT want that $ in our account. It just says lawsuit, tax lien, trouble of six kinds.

  70. Miss Pantalones En Fuego*

    Definitely get out ASAP. Many small businesses are run pretty casually but this sounds like you’re just being taken advantage of. You might think Sam is a good guy who would never screw you over financially but he’s definitely showing pretty clearly that he’s perfectly willing to sacrifice your well-being and that of the company to his procrastination or whatever it is. He’s already doing it. Consider closing the business and restarting it with your other partner, the one who is actually taking it seriously. Talking and scripts are not going to help at this point.

  71. Trek*

    I would give Sam one chance to meet me and the other partner at the bank at specific date time to set up the accounts so that everyone has access. If he doesn’t I’d demand payment for anything outstanding and anything I’ve invested and walk. Any number of things could happen and he’s leaving a huge burden for his wife and his partners.

    1. Grumpy Elder Millennial*

      This would probably make it extremely clear whether Sam is a big problem or a giant problem. Because if he won’t show up with the others at the bank, that’s a GIANT problem.

      On the other hand, I’d only pull this move if I was pretty committed to at least trying to make it work and solve the other problems. And maybe that includes hiring someone to take on the finance stuff, as other commenters have mentioned. But if OP decides to just get out, this will send mixed messages.

  72. Red*

    I’m sure others have mentioned it above but I’m going to just point out again holy heck Sam is actively mismanaging the businesses money. I don’t think he’s out buying Ferraris but he def should not be in charge of the business funds. Also have you seen the taxes for the last couple of years cause how on earth is the business paying it’s taxes if the business funds are being privately held? He either is under reporting or over reporting his liquid assets since the money isn’t in the business’ name. Also if taxes haven’t been filed for the last two years and you’re in a basic partnership you are liable for the taxes. OP, please run. This business has failed.

    1. alouicious*

      Right! So many people only classify money mismanagement as wrong spending, stealing, etc. But exposing your partnership & business to unnecessary and risky liability regarding your funding is also mismanagement!!!

  73. Cringing 24/7*

    OP, I’ve worked in finance for over a decade, and I can guaran-damn-tee you that *everyone* who’s had money embezzled from their business would have sworn up and down that the thief was trustworthy and would have never done that – until they did. I’ve seen the culprit be family-members (sons, nieces, brothers), best friends, former coworkers, spouses, *spouses of coworkers* – the list is never-ending. I’m sorry this business venture didn’t go the way you wanted it to, but I hope that you continue your entrepreneurial efforts – just with other people who want to work as hard as you do to make the business succeed.

    1. Escapee from Corporate Management*

      100%! I’ve had to fire employees for embezzlement and until we found the patterns of bad behavior, none had caused any problems. That’s why every successful business–even ones with completely by-the-book employees–institutes financial controls.

      1. Not a mouse*

        A coworker and I handle a lot of cash for our employer. She gets so upset if anyone points out that she hasn’t followed one of those kinds of rules. “You know me! I would never!” She just doesn’t get that when you make financial and other security rules, they are never based on “X and Y are totally trustworthy,” because you can never know that for sure. If you knew someone wasn’t trustworthy,
        then (at least in a properly functioning organization) you wouldn’t have given them access in the first place. So everyone who embezzles was originally trusted! That’s why financial and other security rules and processes are based on “what happens if the trusted person violates that trust? How can we limit the exposure and damage?”

        1. An Australian In London*

          Plus many financial fails don’t actually turn on honesty or trust.

          A worker can be a saint in terms of their honesty and trustworthiness… and nonetheless fail in infosecurity in a way that causes an account to be drained without recourse.

          I like all the examples of Sam and wife dying, or being sued, or having their personal finances garnished. From the story I am making up about Sam’s diligence and care in general he absolutely sounds like the sort to click on a link in a dodgy email, or to not run good antimalware, or to not religiously apply updates to apps and devices.

          Process exists precisely to not rely on the person, and to make the person’s character irrelevant.

  74. voyager1*

    First I am really glad to see Alison tackle an entrepreneurial question. Nice change of pace.

    Okay so my first thought on this whole story. This enterprise was doomed to fail from the start.

    The idea of starting a business (in a partnership) and working full time is completely crazy to me. I can’t imagine that working out. A sole proprietor, yes maybe, but a partnership… no way.

    When you run a business you need to be comfortable with money, period. If you are not, get a good bookkeeper/CPA.

    That this business didn’t have a plan for earning revenue is a huge red flag.

    That you and your partners are seeing yourselves as employees and not owners is a huge red flag.

    I hope you can get the bank account thing worked out.

    I wish you well, but this partnership is going to take a lot of work to get running correctly.

  75. Amtelope*

    You think it’s a good idea for OP to stay in business with someone who is supposed to be handling the money and has done so by sticking it in his personal checking account?

    1. Amtelope*

      Sorry, that was supposed to be a reply to someone else. Not sure what happened there.

  76. Camellia*

    The best way I’ve ever heard a partnership described, as opposed to a sole proprietorship or a corporation, is this: a two-headed (or in this case, three-headed) anything is a monstrosity. A freak of nature, not designed to survive. It is terribly hard to be equal partners when all the partners are not on the same page, and it’s not easy to change because all partners must agree, support, and implement all changes.

    Please think long and hard about entering into this kind of business arraignment again. Can you start your own business, and then hire who you need to fulfill the roles that these two are not fulfilling now?

    1. Kevin Sours*

      I recall a lawyer who specialized in business structure talking about some clients who wanted to draft a partnership agreement. He actually had to brush up on how to do that because everything he’d been taught about General Partnerships was on the subject of “why you don’t do that”. It’s mostly something you fall into by default rather than actively choose.

  77. Marthooh*

    Someone who is given every opportunity to spend company money as if it were their own is exactly the kind of person who is likely to do so.

  78. TiredAmoeba*

    OP, do you realize how many people in a similar situation thought that person X would absolutely never in a million years do something shady…. until that person does and then the person who was overly trusting gets left holding the bag? You say you don’t want to be involved in the financial aspect, but if you are a business owner, you should have a basic understanding of the financials. Legally, that money belongs to Sam and his wife. If Sam got hit by a truck tomorrow, it’s now his wife’s money and she would have zero obligation to give you a penny without you taking her to court. I think the best thing you can do is bow out of this business since you have no interest in actually managing a business, which is perfectly okay, but by not doing so you’re leaving yourself open to burn out and legal liability.

    See this example of what happened to a business owner who didn’t manage and coasted until they couldn’t: https://www.askamanager.org/2021/08/my-employee-gave-me-an-its-her-or-me-ultimatum.html

  79. Moonbeam Malone*

    OP, make an appointment with your bank and go set up that business account. Make that your #1 priority, please. I’ll absolutely take you at your word that Sam isn’t doing anything nefarious with your funds, but this still needs to be done for all of your sakes for all the reasons other commenters have pointed out. It will not take long to do, and a banker will walk you through it! If you’re worried about whether you’ll choose the “wrong” bank, or that you have to do a lot of research ahead of time, just know it doesn’t have to be set in stone. You can move money to a different bank if you decide to later. (My current company has switched banks a couple times in the last five years – it happens.) Just get it into its own account.

    1. Eldritch Office Worker*

      I mean the majority of people (Americans at least) do not have prenups, most businesses have documents outlining these things though.

  80. An Australian In London*

    OP I feel for you, I really do. This is every grad school group assignment writ large with freeloaders and people not bothering to do their assigned work.

    I think if I were you reading this I might be feeling defensive and that there was a dog-pile of everyone chiming in on how terrible I was. We could talk for a while about what might have been done differently in the past, but since nothing there can be changed I hope it is more helpful to you to focus on the future.

    I hope you gained some clarity in writing the letter. There are a lot of different things to unpack and currently it’s quite a knot whether each thing is making the others both more burdensome and more difficult to deal with:

    – the business does not sound like it is doing very well financially
    – you say important opportunities e.g. grants are being left on the table
    – you say you are personally burned out
    – money out does not sound proportional to effort and responsibility in
    – if your business structure is a partnership then it sounds like you are liable for risks and situations that the other founders have put you in
    – it does not sound like the relationships and communication between the founders is functional or healthy
    – for all the reasons others have said, your share of the business money is at risk even if Sam and Sam’s wife are honest and competent (we do not need to debate here and now how reasonable it is to think so)
    – your personal preferences sound like they rise to the level of aversions, which in turn are causing you to tolerate and therefore collude in the current state of affairs

    That last one is a little harsh and I’m sorry to be one more harsh voice.

    It is OK to prefer to not have to deal with the business’s money. Many business owners and founders also don’t like dealing with money. A responsible way to respond to this aversion is to outsource to competent objective professionals, including an accountant to run the books and an auditor to make sure the accountant is doing everything correctly. Those are valuable professional services and so like anything outsourced the business should expect to pay.

    Your current financial outsourcing – to Sam and apparently at least informally also to Sam’s wife – does not meet the standards for responsible outsourcing. We don’t need to discuss Sam’s honesty because Sam is failing at financial professionalism and financial competence. Your money and you personally are at risk now because of this, and again while any dishonesty on Sam’s part would make those risks worse, there isn’t really any amount of honesty that adequately manages or mitigates all of the risks. As many have said: what if Sam dies, or is sued, or any of a dozen other catastrophes occur which do not turn on honesty?

    You also seem averse to difficult conversations. That is also OK in a business owner or founder and many partnerships are founded in part to outsource some personality traits to another founder.

    What’s not OK is to outsource diligence and responsibility. Depending on exactly what business structure you have, and what formal documents exist (if any), you are probably personally liable for all decisions made by any of the three founders, just as they are for your decisions.

    As many have said I do not believe you have any chance of turning the situation around. I love you for wanting to, in many ways that speaks highly of you. I worry that it also speaks of further conflict avoidance, being blinded by sunk costs, and a certain amount of magical thinking… and those are not traits that can be in a founder and business owner for very long, because they are traits that cause businesses to fail.

    It is OK to hope that it will all work out but that does not relieve you of your duty to plan for none of it working out.

    Sorry for such a long answer. My heart goes out to you.

  81. TheRain'sSmallHands*

    My current business partner had a previous business. It started OK….but she was doing all the work and the other two guys….well….when the lawsuit hit they actually said “we thought we’d get rich off of her, but she didn’t sell enough, so we couldn’t quit our day jobs” It was all the problems…it started fine, then one had some personal problems and just borrowed a little money from the business…and then a little more…and they are spending the revenue without paying the bills because once you start digging that hole, it just gets deeper, and pretty soon she’s working and not seeing any income while the two of them are expensing their cars and then anything else they can expense (groceries – one of them was expensing his groceries!) – which comes out before profits, and she gets a cut of profits…you see where its going. Since she was sales and one of the other guys was finance – she didn’t have visibility into what was happening – until the lawsuit.

    She’s now my business partner and is still cleaning up the mess created (not my mess – just her personal financial stuff). The nice thing is that the court gave her the book of business – so we managed to keep some of the clients and consultants. I’m not sure WHY the consultants and clients stuck around – well, I know why – my business partner has a 22 charisma (and a 8 Wisdom – fortunately- she’s sales). We spent a ton of cash to incorporate properly with legal advice and an exit plan and enough corporate shielding to hopefully drive a bus through because I don’t want to end up in court.

    These guys could be really well intentioned, but intentions aren’t going to create a successful business. And I think the guys my partner worked with started well intentioned, but started slipping as their lives got out of control – which happens with lives. And that’s why you want a separate bank account, financial transparency, and also transparency in terms of what each of you has contributed each month to the business in terms of time, effort, contacts – whatever resources you are putting in, every month you need to be sitting down to talk about it.

    1. Grumpy Elder Millennial*

      They said they thought they’d get rich off her? In a lawsuit? And they thought that would be a winning legal argument?

  82. Saradactyl*

    This is giving me serious ‘weaponised incompetence’ vibes. I suspect that the OP is someone who is AFAB/fem-presenting, and Sam and James are both AMAB/masc-presenting, and this is really making me think of this familiar dynamic in cishet relationships. It is sadly common that the AMAB partner will intentionally leave the work for the AFAB partner or do an intentionally terrible, half-assed job of whatever tasks she asks of him so she has to redo it herself (after all the effort spent to get him to do the task in the first place) or she has to spend her time and effort teaching and re-teaching him how to do the task, only to have him intentionally screw it up again next time, so she still has to do that work over again. Eventually, she just stops asking him to help carry the load and just does the work herself, which was his gross goal all along.
    The OP said that Sam gets ‘bailed out often’ in this manner, so that leads me even further in that direction. It is common for cishet men to put all the organisational, emotional, and daily functionality labour on their female partners in relationships, and I’ve seen it often in the workplace between coworkers and supervisor/report relationships too.

    1. Zweisatz*

      Sometimes it is better to say “men” and “women”. Because your example is otherwise implying that trans women behave exactly as cis men in relationships.
      And in any case it is about societal forces vis a vis gender, so who gets assigned the social role of man and who of woman. So saying “man” and “woman” here is totally fine.

  83. All Outrage, All The Time*

    “Hey guys I was really excited about this when we first kicked off but it’s becoming clear that I’ve over extended myself. Let’s do whatever paperwork is required for me to turn things over to you two. Then cut me a cheque for my share, thanks.”

    Get out, out, out. Get your money and get out. Get out legally. The red flags are multiplying. Extract yourself asap. You can run a business on your own, clearly. You don’t need these two “partners”. Especially not one who thinks irs fine to commingle YOUR money with his own. Nope on out of there.

    Also, get comfortable with money, or get a professional bookkeeper.

    1. Yellow*

      Depending on how they set things up, that share might be zero. Or might be negative.

      Depending on the set up, you can’t necessarily force your business partners to buy you out, and definitely not at your chosen price. LW needs to understand their liabilities, and what they are entitled to, if they do decide to walk. A conversation about the business in general is probably going to be more successful.

  84. JustSomeone*

    The LW *absolutely* needs to take a realistic hard look at her partners and her business as they actually are, not as she believes they will be or wishes they could be. This will probably mean stepping away.

    HOWEVER, maybe not. Sam is failing with the money—and badly. Is he bringing any actual value to the table at all?

    James is a prominent figure in this niche. Does he contribute anything besides his name? Is his name valuable enough to partner with him solely for the name recognition even if he contributes nothing else? There are absolutely circumstances where that would make sense; if you have the opportunity to be, say, the Michael Jordan School of Basketball, you don’t expect MJ to make sales calls or change the toner.

    What actual value does each partner bring to the venture. If it’s none/minimal, then part ways for sure. But if there’s value there after all, you may need to think about this differently.

    If your spouse is a slob and that’s not likely to change, there’s always the option of divorce. But there’s also the option of accepting that fact about them and shifting other factors to accommodate it. Maybe you hire a maid. Maybe you work fewer wage hours so you can spend more time cleaning. Maybe you just actively decide not to let the mess bother you.

    There are parallels here. Hypothetically, let’s say James adds no value beyond his name, but that that’s worth something. This is a business with money in the bank, and funds are being dispersed at a rate that at least one partner finds financially significant. How about you all quit pulling money out and instead invest in the business? Hire a freelance grant writer to get this business to the next level. Hire someone to keep track of the money.

    Accept that Sam and James aren’t going to just magically start doing the work themselves. It’s up to you whether that means you come up with strategies to make that not matter or whether you run.

    But either way, insist that the money gets squared away.

  85. Startup fan*

    the money is in his and his wife’s joint checking account. (I know this will raise questions of money mismanagement but Sam is not that kind of person

    Conmingling corporate money with personal money is almost by definition mismanagement. (It can also cause you to lose limited liability.)

    1. Grumpy Elder Millennial*

      Yeah, this is not good. I’ve never run a real business and even I know this is a problem. I think OP was talking about questions that Sam might be using this set-up to steal money from the others.

  86. Yellow*

    LW did you have a formal, written, business plan when you started this? Did you have clear understandings of the goal for the business and for each of you? Did you have goals and timelines for being financially self sufficient? How are you teaching against those goals?

    It’s not clear to me who is following the plan and who isn’t. Is it that the others are slacking and just riding off you? Is it that you’ve got one idea for the business, they have another, and those ideas aren’t compatible? Is it somewhere in between?

    If they saw this as a side gig that would earn a bit of money, but they would continue to have full time (or close to full time) main positions then their attitude would be really different than if they saw this as their full time earning. Even if they thought it would be nice for this to be full time, that’s different to planning in that!

    From a practical standpoint, I think you first need to figure out exactly what YOU want in terms of this business. What would you require in order to be happy with things?

    Once you know what you want you can consider if it’s feasible. If it is feasible, you need to decide if it is worth the investment (time, money, relationship impacts etc). If you’re hitting no at any point, then you need to work to remove yourself from the partnership. That doesn’t have to mean walking away and blowing everything up, but winding down and closing out in the near future.

    In all honesty, for what sounds like a company that isn’t financially self sufficient, I think you would struggle to argue that you should get a significant pay rise out of your partners’ pay packets. Especially since you don’t seem ready/interested/able to literally but them out and employ them.

  87. A Kate*

    OP, these are not serious people. If you’re careful, you might be able to salvage your friendships with them, but you really do need to get out of business with them.

  88. Grumpy Elder Millennial*

    I can potentially see the benefit of doing some sort of “level-set” where the three of you bring lists of the things you’re responsible for (perhaps even with an estimate of time required) and try to change people’s lists to make things more equal. It feels a lot less aggressive than jumping to redistributing pay. Maybe it will make it more obvious to the others just how much more work OP is doing. But I’m extremely skeptical this will actually change anything in a situation where they haven’t offered any help when you have specifically told them you need it (I am assuming here that you were very clear, OP) and they won’t do even basic stuff like set up a freaking bank account. Especially when there is no fall-out for them refusing to really contribute.

    I get that you don’t want to rock the boat and are (understandably) worried that the business will fail if you do. But it seems like the business isn’t doing great while you don’t. I’m sorry that you’re in a situation where you’ve invested so much time and energy and love into this business and the outlook isn’t great. But if tough conversations about people’s workloads, output, etc. would tank the business, it’s going to go down at some point.

  89. awasky*

    I know many commenters have said this already, but as a CPA and auditor, having the business funds in Sam’s personal account is catastrophically bad. Saying that you’re not worried about Sam embezzling shows a fundamental misunderstanding of how embezzling happens. Is Sam giving you a bank statement for his personal account every month with all of the business activity and his personal activity to reconcile that he hasn’t drawn out of the business pool of funds? What if he has autopay set up on his mortgage or his credit card and overspends one month–that money will come straight out of your business funds. It’s not that he’s going to go buy a Porsche. It’s that this set up makes it super easy to just have no idea what happened to the money.

    – You mentioned pursuing grant funding. All the grants I know of would disqualify you for not having even basic controls over your finances.
    – Others have said this, but this creates an enormous problem for liability. If the business gets sued, all Sam’s personal assets get pulled in (and that’s not even addressing the question of whether you have set up the proper legal structure).
    – Bankruptcy will go after Sam’s assets.
    – Taxes. Oooooh taxes.
    – Legal ownership–if this turned into an acrimonious break up, you have no legal claim to that money.

    I know you said you don’t want to deal with the money stuff, but being a business owner REQUIRES dealing with the money stuff. Maybe that’s not your main job, but you have to pay attention to the money or you will get screwed. If you want a demonstration of this, may I recommend reading about the Ample Hills bankruptcy: https://marker.medium.com/the-shocking-meltdown-of-ample-hills-brooklyns-hottest-ice-cream-company-66b27dc1791d

  90. Raida*

    “(especially since it seems like Sam often gets bailed out in this way)”

    Mate. This isn’t someone to go into business with in the first place.
    If you’ve had the business more than a month and it doesn’t have a bank account, that’s when I would have pumped the brakes and allocated one rigidly scheduled meeting per week which is dedicated to finishing business related tasks.
    If they still don’t do THEIR JOB, then close the business – or see if the other two want to buy me out.

    You can’t make them good business partners, and most businesses do not exist after several years anyway – you aren’t likely to succeed long-term to begin with, it’s going to be impossible with dead weight.

    Close the business, or sell it, or buy them out and get the accounts set up by a pro, then have a VA qualified in bookeeping to keep it tidy.

  91. RosemaryMarian*

    If Sam hasn’t set up a business account after 2 years, how long will it likely take him to transfer back to you your share of any money if you request it, OP?

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