{"id":12233,"date":"2026-09-24T00:45:55","date_gmt":"2026-09-23T16:45:55","guid":{"rendered":"https:\/\/fdlaw.com.tw\/?p=12233"},"modified":"2026-09-24T15:04:49","modified_gmt":"2026-09-24T07:04:49","slug":"shareholder-company-funds-misappropriation","status":"publish","type":"post","link":"https:\/\/fdlaw.com.tw\/en\/blog\/shareholder-company-funds-misappropriation\/","title":{"rendered":"What should you do if shareholders suspect the company has been embezzled? Start by investigating the accounting books, cash flow, and related-party transactions."},"content":{"rendered":"<style>\n.fd-shareholder{font-family:inherit;color:#263445;line-height:1.9}.fd-shareholder *{box-sizing:border-box}.fd-shareholder h2{margin:38px 0 16px;padding:14px 18px;border-left:4px solid #a87828;background:#f6f3ed;color:#173250;font-size:25px;line-height:1.45}.fd-shareholder h3{margin:22px 0 8px;color:#173250;font-size:19px}.fd-shareholder p,.fd-shareholder li{font-size:17px;line-height:1.95}.fd-shareholder p{margin:0 0 18px}.fd-shareholder a{color:#145da0;text-decoration:underline;text-underline-offset:3px}.fd-hero{padding:26px 28px;margin-bottom:28px;border:1px solid #d8e3ee;border-radius:8px;background:linear-gradient(180deg,#f8fbff,#fff)}.fd-hero h2,.fd-contactbox h2{margin:0 0 14px;padding:0;border:0;background:none}.fd-check{margin:14px 0 0;padding-left:24px}.fd-check li{margin:6px 0}.fd-contactbox{margin:28px 0;padding:24px 26px;border:1px solid #d9c49c;border-radius:8px;background:#fffaf0}.fd-contact{display:flex;flex-wrap:wrap;gap:12px 24px;margin-top:12px}.fd-contact a{font-weight:700}.fd-note{padding:18px 20px;border-left:4px solid #8ba4be;background:#f7f9fb}.fd-faq{padding:18px 20px;border:1px solid #dbe3eb;border-radius:8px;background:#fbfcfe}@media(max-width:720px){.fd-hero,.fd-contactbox{padding:20px 18px}.fd-shareholder h2{font-size:22px}}\n<\/style>\n<article class=\"fd-shareholder\">\n<section class=\"fd-hero\"><h2>First obtain the information, then reconstruct the transaction, and finally decide on legal means.<\/h2><p>&quot;I know the company has revenue, but it says it hasn&#039;t made any money every year; they won&#039;t let us see the books; the company keeps transferring money to related companies; and the personal expenses of the person in charge seem to be borne by the company.&quot; In this situation, the most important thing for shareholders is not to immediately label it as &quot;embezzlement&quot; or &quot;breach of trust,&quot; but to first obtain enough information to reconstruct the company&#039;s transactions and cash flow.<\/p><ol class=\"fd-check\"><li>Company type and one&#039;s shareholder status.<\/li><li>Shareholding status and actual management control.<\/li><li>What information is the company currently willing to provide?<\/li><li>Which ledgers or bank records are unavailable?<\/li><li>The period, amount, and recipient of suspicious transactions.<\/li><li>Which related persons or companies are involved?<\/li><li>How much money did the company pay, and what did it actually receive?<\/li><li>Whether it has been approved by the board of directors, shareholders&#039; meeting or internal authorities.<\/li><li>The company&#039;s stated purpose of the transaction is consistent with existing documents.<\/li><\/ol><p>When information is insufficient, suspicion may have a reasonable basis, but it cannot be directly equated with a crime. The legally obtainable information and appropriate procedures for shareholders should be confirmed first before determining the appropriate means of investigation, inspection, civil or criminal action.<\/p><\/section>\n<h2>When shareholders suspect their company has been embezzled, the first step is not to file a lawsuit, but to confirm &quot;what information you can access&quot;.<\/h2>\n<p>The legal avenues available will vary depending on whether the company is a limited liability company, a joint-stock company, or another type, the identity and shareholding of shareholders, the company&#039;s articles of association, current procedures, and the specific types of documents requested. Shareholder access and oversight procedures and court processes differ across company types, and rules applicable to one type of company cannot be directly applied to another.<\/p>\n<p>In practice, one should first review the shareholder register, articles of association, minutes of shareholders&#039; meetings or board meetings, financial statements, accounting books, transaction vouchers, and other documents legally prepared by the company, and record any information that the company has provided, refused to provide, or only provided in part. This is also crucial for subsequent assessments.<a href=\"https:\/\/fdlaw.com.tw\/en\/blog\/partnership-dispute\/\">Disputes over shareholders, company books and management<\/a>An important starting point in time.<\/p>\n<h2>If a company refuses to provide accounting books or only provides partial information, what are the next steps?<\/h2>\n<p>Shareholders should first provide a verifiable document detailing the information, timeframe, and purpose of the request for review, avoiding simply stating &quot;requesting all books.&quot; If the company still refuses or provides material that is clearly incomplete, shareholders can assess options such as a lawyer&#039;s letter, company law review or oversight mechanisms, court proceedings, requesting the appointment of an inspector, civil litigation, or evidence preservation, depending on the company type, shareholder qualifications, and the facts.<\/p>\n<p>These tools are not available to every shareholder in every situation. Whether a request is reasonable, relevant to the shareholder&#039;s interests and the company&#039;s operations, and complies with legal qualifications and procedures must be determined on a case-by-case basis. Maintaining a complete record of requests and denials is often more valuable than repeated verbal disputes.<\/p>\n<h2>What is an &quot;inspector&quot;? Why would shareholders consider filing for one?<\/h2>\n<p>An inspector conducts an inspection of a company&#039;s business accounts, financial situation, or specific matters within the approved scope, in accordance with company law and court procedures; it is not a case of &quot;the court turning over the entire company for the shareholders.&quot; Whether an application can be made, the applicant&#039;s qualifications, shareholding and holding period, and the necessity and scope of the inspection must be determined based on the company type and current regulations, and the court will also consider the specific evidence.<\/p>\n<p>Long-standing unclear accounts, lack of reasonable explanation for transactions involving significant related parties, unclear fund flows, and the company&#039;s refusal to provide a reasonable explanation for the disposal of significant assets may be reasons for shareholders to consider an investigation, but this does not mean the court will necessarily grant permission. The application should focus on specific periods, transactions, or points of suspicion, rather than treating the investigator as a general search tool.<\/p>\n<h2>Which transactions are most likely to make shareholders suspect that company assets have been transferred?<\/h2>\n<p>Common warning signs include the company lending funds to its executives or related companies, high consulting fees or unusual commissions, long-term prepayments, financial transactions without clear business purpose, selling assets at low prices, purchasing from related parties at high prices, listing executives&#039; personal expenses as company expenses, large amounts of shareholder transactions, frequent cash withdrawals, unclear receivables or payables, and related companies occupying company personnel or equipment for extended periods.<\/p>\n<p>These transactions are not necessarily illegal. Each transaction should be examined individually, considering its business purpose, approved authority, pricing basis, contracts and documentation, actual performance, ultimate beneficiary, and whether the company received commensurate value. If the company itself already possesses specific information regarding misappropriation by supervisors or employees, further investigation is necessary.<a href=\"https:\/\/fdlaw.com.tw\/en\/blog\/employee-misappropriation-company-funds\/\">Company&#039;s handling of cases where supervisors or employees are found to have embezzled funds.<\/a>This approach differs from the verification issues faced by shareholders when they are at an information disadvantage.<\/p>\n<section class=\"fd-contactbox\"><h2>Can&#039;t get the accounting records, or are there significant doubts about related-party transactions and the company&#039;s cash flow?<\/h2><p>If you are a shareholder of a company and are currently encountering issues such as the company refusing to provide accounting records, unusual transactions by related parties, unclear company fund flows, or suspicion that the person in charge has transferred company funds or assets to themselves or related companies, you can first compile shareholding information, company documents, currently obtained accounting records, bank or transaction data, and a list of suspicious transactions. A lawyer can then determine whether to proceed with an investigation, a search of the individuals involved, company law procedures, civil claims, or criminal charges.<\/p><div class=\"fd-contact\"><a href=\"tel:0277093611\">Telephone: 02-7709-3611<\/a><a href=\"https:\/\/line.me\/ti\/p\/@723pifhz\" target=\"_blank\" rel=\"noopener\">LINE: @fdlaw<\/a><\/div><\/section>\n<h2>Once shareholders actually receive the accounting books, how should they interpret them?<\/h2>\n<p>The goal is not just to see if the company has a surplus, but to cross-reference &quot;bank statements \u00d7 accounting books \u00d7 contracts \u00d7 invoices \u00d7 actual transactions \u00d7 internal approvals \u00d7 related parties&quot;. First, trace when the funds left the company, which account they entered, what the recorded purpose was, who the actual counterparty was, whether the goods or services existed, and whether the company obtained the corresponding value.<\/p>\n<p>For example, if consulting fees are recorded in the accounts, the contract, work results, requester, approver, receiving account, and ultimate beneficiary should be compared. For asset sales, the pricing, buyer-seller relationship, payment, and delivery status should be examined. If the same related parties repeatedly benefit, the recorded purpose does not match the actual transaction, or there is only payment without verifiable performance, further clarification is warranted.<\/p>\n<h2>If you see abnormal cash flow, can you directly sue the person in charge for breach of trust or embezzlement?<\/h2>\n<p>Suspicion does not equate to criminal liability. Breach of trust typically requires examining the entrusted task, the act of breaching the task, the unlawful gain or intent to harm, and the potential damage to the company. Embezzlement requires clarifying whether the person legitimately held company property in the course of business and subsequently appropriated it for personal gain. If fictitious transactions or misrepresentations are involved, fraud or other liabilities may also need to be analyzed.<\/p>\n<p>The same transaction could also involve corporate governance violations, civil restitution or damages, accounting issues, failed business judgment, or simply shareholder distrust. The legal characterization depends on the position, authority, fund holding relationships, subjective intent, personal or third-party interests, corporate damages, and the transaction&#039;s background. If the responsible person is already a defendant, further details should be considered.<a href=\"https:\/\/fdlaw.com.tw\/en\/blog\/company-director-breach-of-trust\/\">Handling of cases where company executives are accused of breach of trust<\/a>This is different from the information acquisition strategy on this page&#039;s shareholder side.<\/p>\n<h2>What circumstances warrant further evaluation of the criminal complaint?<\/h2>\n<p>For example, repeated transfers of company funds to private or related party accounts, transactions that clearly do not exist, repeated false requests for funds, unauthorized transfer of assets, misuse of company funds for personal purposes, deliberate fabrication of false transaction documents, or significant discrepancies between cash flows and accounting records all warrant investigation.<a href=\"https:\/\/fdlaw.com.tw\/en\/corporate-criminal\/\">White-collar crime and major economic crimes<\/a>Further investigation is needed.<\/p>\n<p>Whether to file a criminal complaint should be based on evidence, not just on a loss of trust among shareholders. Prematurely replacing investigation with criminal charges may complicate company disputes and may cause the preservation of essential accounting records, financial statements, and communications data to be overlooked; conversely, when there is concrete suspicion of a crime or continuous loss of assets, legal reporting and evidence preservation should not be delayed.<\/p>\n<h2>Besides criminal charges, what other corporate law or civil instruments are available to shareholders?<\/h2>\n<p>Depending on the company type, shareholder qualifications, and specific facts, the proceedings may involve access to company records, corporate governance procedures, inspection mechanisms, civil restitution, damages, liability of responsible persons, shareholder litigation mechanisms for holding the company accountable by qualified entities, and asset preservation assessments when statutory requirements are met. The requesting parties, requirements, and effects differ for each procedure; holding shares does not automatically grant one the right to dispose of rights on behalf of the company.<\/p>\n<p>When it is necessary to integrate company law, contracts, and compensation strategies, one can start from...<a href=\"https:\/\/fdlaw.com.tw\/en\/commercial\/\">Shareholder disputes and corporate commercial litigation<\/a>The planning should be angled to avoid conflicts between criminal and civil procedures.<\/p>\n<h2>Are shareholders looking to protect themselves or to help the company recover losses? These are not entirely the same question.<\/h2>\n<p>A company is an independent legal entity, and company funds are not directly equivalent to the personal assets of each shareholder. If a suspicious transaction causes losses to the company, the company&#039;s rights should first be clarified; only if a shareholder suffers direct damages in voting rights, information rights, dividends, equity transactions, or contracts should the matter be analyzed individually.<\/p>\n<p>This distinction affects who can file a claim, to whom a return is requested, what kind of damage needs to be proven, and which procedure should be followed. A decline in stock price or share value does not necessarily replace proof of damage to the company itself; conversely, company losses do not mean that every shareholder can claim the full amount in their own name.<\/p>\n<h2>Before seeking a lawyer&#039;s assessment, what documents should shareholders prepare?<\/h2>\n<p>First, compile the company name and type, shareholding ratio, shareholder register, articles of association, shareholder meeting and board meeting information, financial statements, obtained accounting books and bank information, list of suspicious transactions, related parties and related companies, contracts, invoices, communications, records of the company refusing to provide information, important dates and estimated amounts.<\/p>\n<p>It should also explain the current relationship with other shareholders and the company, and that the true objective is to uncover the truth, stop asset loss, obtain accounting records, appoint an inspector, hold those responsible accountable, recover company losses, or withdraw from the company and resolve the shareholder deadlock. Different objectives will lead to different procedures and order of evidence.<\/p>\n<h2>Why can&#039;t we usually only look at criminal law provisions when &quot;shareholders suspect that the company has been emptied out&quot;?<\/h2>\n<p>These types of cases often involve corporate law, shareholder rights, corporate governance, contracts, accounting, bank transactions, related-party transactions, criminal law, civil claims, and procedural evidence. The real difficulty lies not in determining the charges first, but in reconstructing how company assets flowed, who had the authority to make those decisions, whether the transactions had any substance, and what the company actually gained.<\/p>\n<p>Only when transactions, permissions, cash flow, and damages are placed on the same chart can it be better determined whether to obtain information, request explanations, initiate court proceedings, pursue civil liability, or file a criminal complaint first.<\/p>\n<h2>Frequently Asked Questions<\/h2>\n<section class=\"fd-faq\"><h3>Do shareholders have the right to request to see the company&#039;s books?<\/h3><p>They may have the right to access information, but the scope, method, and requirements for such access will vary depending on the company type, shareholder status, request documents, and current regulations, and cannot be generalized.<\/p><h3>What can you do if your company won&#039;t allow shareholders to inspect the accounts?<\/h3><p>You can first submit a specific and verifiable written request, keep a record of any refusal, and then assess the legal options, such as a lawyer&#039;s letter, corporate law procedures, or court proceedings, depending on the company type and shareholder qualifications.<\/p><h3>Under what circumstances can shareholders consider requesting an inspector?<\/h3><p>An assessment may be conducted when a company&#039;s finances are unclear for a long period of time, or when there is a lack of reasonable explanation for transactions involving major related parties or the disposal of assets; however, the eligibility, necessity, and scope of such assessments are still determined by current laws and courts on a case-by-case basis.<\/p><h3>Does a person in charge transferring company money to a related company necessarily constitute a breach of trust?<\/h3><p>Not necessarily. The purpose of the transaction, authorization, price, performance, beneficiary, subjective intent, and whether the company has suffered harm still need to be examined.<\/p><h3>If a shareholder discovers irregular cash flow, can they directly sue the person in charge for embezzlement or breach of trust?<\/h3><p>You may file a complaint or report in accordance with the law, but whether it is appropriate to do so immediately should be assessed based on the ownership of funds, authority, and the completeness of the evidence.<\/p><h3>Can a criminal complaint help the company recover the money?<\/h3><p>Criminal liability and the return of funds are different issues. The company may still need to assess civil claims, appropriate incidental proceedings, or legal asset preservation measures; it cannot be assumed that filing a lawsuit will necessarily result in the recovery of funds.<\/p><h3>What is the difference between harm to the shareholders and harm to the company?<\/h3><p>The company and its shareholders are different rights holders. The attribution of damages will affect the claimant, the object of restitution, the evidence, and the procedure. It is necessary to first distinguish whether the company&#039;s property has been damaged or whether the shareholders have other direct rights that have been infringed.<\/p><\/section>\n<\/article>","protected":false},"excerpt":{"rendered":"<p>\u5148\u53d6\u5f97\u8cc7\u6599\u3001\u91cd\u5efa\u4ea4\u6613\uff0c\u518d\u6c7a\u5b9a\u6cd5\u5f8b\u624b\u6bb5 \u300c\u6211\u77e5\u9053\u516c\u53f8\u6709\u71df\u6536\uff0c\u4f46\u6bcf\u5e74\u90fd\u8aaa\u6c92\u8cfa\u9322\uff1b\u5e33\u518a\u4e0d\u7d66\u770b\uff1b\u516c\u53f8\u4e00\u76f4\u628a\u9322\u532f\u7d66\u95dc\u4fc2\u4f01 [&hellip;]<\/p>","protected":false},"author":1,"featured_media":12235,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"qubely_global_settings":"","qubely_interactions":"","footnotes":""},"categories":[136],"tags":[325],"class_list":["post-12233","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-law","tag-325"],"blocksy_meta":[],"qubely_featured_image_url":{"full":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-scaled.jpeg",2560,1396,false],"landscape":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-1200x750.jpeg",1200,750,true],"portraits":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-540x320.jpeg",540,320,true],"thumbnail":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-150x150.jpeg",150,150,true],"medium":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-300x164.jpeg",300,164,true],"medium_large":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-768x419.jpeg",768,419,true],"large":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-1024x559.jpeg",1024,559,true],"1536x1536":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-1536x838.jpeg",1536,838,true],"2048x2048":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-2048x1117.jpeg",2048,1117,true],"trp-custom-language-flag":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-18x10.jpeg",18,10,true],"qubely_landscape":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-1200x750.jpeg",1200,750,true],"qubely_portrait":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-540x320.jpeg",540,320,true],"qubely_thumbnail":["https:\/\/fdlaw.com.tw\/wp-content\/uploads\/2026\/09\/Gemini_Generated_Image_8vt8zz8vt8zz8vt8-140x100.jpeg",140,100,true]},"qubely_author":{"display_name":"\u53f0\u5317\u5f8b\u5e2b\u63a8\u85a6","author_link":"https:\/\/fdlaw.com.tw\/en\/author\/admin\/"},"qubely_comment":0,"qubely_category":"<a href=\"https:\/\/fdlaw.com.tw\/en\/blog\/category\/commercial-law\/\" rel=\"category tag\">\u5546\u6cd5<\/a>","qubely_excerpt":"\u5148\u53d6\u5f97\u8cc7\u6599\u3001\u91cd\u5efa\u4ea4\u6613\uff0c\u518d\u6c7a\u5b9a\u6cd5\u5f8b\u624b\u6bb5 \u300c\u6211\u77e5\u9053\u516c\u53f8\u6709\u71df\u6536\uff0c\u4f46\u6bcf\u5e74\u90fd\u8aaa\u6c92\u8cfa\u9322\uff1b\u5e33\u518a\u4e0d\u7d66\u770b\uff1b\u516c\u53f8\u4e00\u76f4\u628a\u9322\u532f\u7d66\u95dc\u4fc2\u4f01&hellip;","_links":{"self":[{"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/posts\/12233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/comments?post=12233"}],"version-history":[{"count":2,"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/posts\/12233\/revisions"}],"predecessor-version":[{"id":12252,"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/posts\/12233\/revisions\/12252"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/media\/12235"}],"wp:attachment":[{"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/media?parent=12233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/categories?post=12233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fdlaw.com.tw\/en\/wp-json\/wp\/v2\/tags?post=12233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}