Simon Williams admitted paying invoices to himself to get money out of the business before selling it in January 2010, the Middlesbrough Gazette reports.
Mr Williams, aged 46, received 65,000 in cash and £435,000 in loan notes when he sold the business last year. His retired father, who had founded the firm, received just over £50,000.
Teesside Crown Court heard that when the new owners had a problem with a payment to a subcontractor last September, they recalled the cheque from the bank they found that it had been made payable to Mr Williams.
Further inquiries revealed that other invoices totalling £42,000 had been paid to Mr Williams instead of to subcontractors.
Mr Williams admitted that he had been trying to get money out of the business before he sold it.
He has since paid the money back to the company and co-operated fully with the police.
Mr Williams, of Wheatlands Park, Redcar, was ordered to do 200 hours’ community service, given a six-month jail sentence suspended for two years, and ordered to pay £1,000 costs.