How can a business partner forgive and forget embezzlement by their partner?

Once the money is repaid, the damage is fixed and the embezzler has served the allotted time in prison you can forgive them.

You don't forget, because they can and will try it again.  They are a snake and it is in their nature to be dishonest.

They shouldn't.

You can forgive, but forget -- never.  There are consequences to sin.  The embezzler should be held accountable for the money he stole.  However, forgiveness means not to harbor bitterness, and let it destroy you inside.  However, it does not mean that you have to release the partner from due consequences.  Nor does it mean you must reinstate them to a position of trust. "You will know them by their fruits" - their "fruits" have shown them untrustworthy.  This you should not forget.