Re: Dissolution of an S-corp
Start by re-reading your Articles of Incorporation and bylaws. The Articles probably contain nothing relevant, but the bylaws should.
More likely than not, there is nothing in the bylaws that will be directly relevant and helpful; the power to dissolve the corporation is probably given to the shareholders, and you know who wins that one. It may be possible for the directors to vote to dissolve, but even if you have cumulative voting for directors (assuring that you are both directors), that results in deadlock.
Note that a corporation must have at least as many directors, up to three, as it has shareholders. I assume there are two shareholders and hence two directors, you and the "partner."
Since you probably don't have the power to bring about a voluntary dissolution process, you'll need to look at the grounds for involuntary dissolution set forth in the Corporations Code, sections 1800 to 1809. Look in particular at 1800(b)(2).
Another possibility is for you simply to resign your positions as secretary, CFO and director, in writing, given to the co-owner. Then stop participating. Your risk is quiute low, probably low enough to take in order to avoid the hassle of forcing a dissolution. You'd continue to be a stockholder and as long as you didn't revoke your "S" election, you'd get a K-1 and probably some losses you could write off.
Getting bought out might be a better alternative, but the 51% holder has little incentive to pay you anything. On the other hand, if the comapny is moribund, maybe $1 would be a generous buyout.
Other inducements you can offer the other guy to buy you out include a threat to revoke the "S" election with the IRS - which depends upon your continued acquiescence - or to sell some or all of your stock to a third party, thus maybe forcing the company to have a third director or for him to have to deal with a stranger. (Your bylaws may prevent this).
