My wife and I entered a business partnership agreement with a man who claimed he would financially back a food/hospitality business idea and make us a 50/50 partner if my highly skilled and experienced wife would do the setting up and management of the business. We made the arrangements, quit our positions and took up the offer. Right at the point of set-up he then reneged on the deal stating he had no money to fund the project. Still, it was a good opportunity so we set up an agreement whereby my wife and himself got a joint business loan and a personal loan from my wife family. Through initial good-will talks 50/50 partnership for 50/50 workload. From the day the doors opened, he worked a total of 2hrs to my wife and I's 12+ each. When we confronted him, his response was that he was quitting his job in the near future and he would make it up. Starting a new business and still seeing a great opportunity, we took him at his word and just got on with making a very successful small business. In 5 years, he never quit his job, nor did the workload ever go up, and only dropped off gradually until he just stopped all together. His practices were dodgy, decision making - that of a person inexperienced in the profession and we let it go on longer than it should of, reasoning he and his rather 'aggressive' wife were just better kept away from the place, and the business was doing great. We from time to time renewed our argument that a deal is a deal and he needed to be involved in the business given at the end of financial year - he was the first to put his hand out, and the first to question why there wasn't more. Despite our reminders he was no longer an investor but a partner who needed to work in the business to uphold his end of the agreement, nothing ever changed. We have been met with a litany of excuses, reasoning, false claims to take a hands on role, disregard, ill communication, no communication, and straight up avoidance of taking our phone calls, requests to respond to business dealings. 5.5 years has passed (yes, we are very patient people, if not a touch naive ) and its at a stage where there is little to no communication and almost mocking responses to our calls for change. With the breakdown of the relationship, we have managed to discuss separating / selling the business. He has recently been made redundant, and is offering to buy us out for a rather insulting figure. Thats fine, a separate matter of sorts, but, there has been a recent discovery that we feel is of utter importance. 9 months ago, my wife and I welcomed our first baby, which was the turning point in which he agreed to take the reigns so we could focus on taking care of our new born. His work ethic did not change, he only visited the store to collect the days takings, or, if absolutely pestered by ourselves or staff to take care of major issues. About 1 month ago, our accountant rang to clarify some discrepancies in what has been recorded as daily takings, and what has actually been making it into the bank account. $5500 - in total missing. My wife has had to go back over the bookwork, which has turned up, form the very day our daughter was born, monies has been skimmed from the top. We decided to give the partner the benefit of the doubt and approach him to get his response to what has happened to a missing $5500. The initial response was; ' not sure'. That turned in to, 'double paid a bill' which he cannot recall, and has no documentation of, or even the name of an organisation. We have given him the opportunity to look for it and find where its been 'misplaced', or have a good hard think if the staff had access to the money. He has charged that ' I didn't steal any money' - but still refused to investigate what happened to the money on his watch. Then he offered ' to go halves' with us in fixing up the missing money, to then offering to pay what was lost on his watch, all whilst avoiding any talk that the money was ever in his hands. However, the paper trail puts that money square in his hands, and it's our view that if he was not responsible for it's going missing, he is at the very least an incompetent partner to overlook $5500 missing and not once raise the notion of investigating the matter. Combined with this, he has since come to the attention of the ATO; been served with a debt and taken to paying off the bill with money from the business without so much as consulting my wife. We have no interest in continuing with this individual and from a legal perspective I am asking, what course of action is the next step for my wife and i?