Shareholders established a branched corporate structure of limited liability companies for the purpose of providing personnel services, while committing criminal offenses of fraud and money laundering. At the end of the criminal proceeding, one of them moved the Court, inter alia, for relief of dissolution of the ‘partnership’ and an order for the provision of accounts.
The Court rejected the claim for accounts because there was no partnership between the parties, but rather conduct within the framework of limited liability companies. In order to provide accountability, it is necessary to prove the existence of a special relationship that justifies the provision of accounts, such as: a partnership relationship. Once there is a certain form of incorporation regulated by law, all other forms of incorporation - including a partnership - do not apply, other than in exceptional cases such as: when it comes to family members and there is a restriction on the transfer of ownership of shares in the company. Here, the parties did not enter into a written partnership agreement, but rather conducted themselves within the framework of the formal corporate structure of limited liability companies, including with regard to the signature rights that required the signature of both parties and the company's stamp (in a manner that is not typical for a partnership) and the manner of reporting to the tax authorities that was done as a limited liability company, which is completely different form of reporting from that of a partnership. In light of this, no remedy of accounting between partners may be granted.