I am a co-shareholder within my corporation (owning 50%). My brother owns the other 50%. This was my fathers corporation that was transferred to us upon his death. Unfortunately, we do not see very much eye to eye, and to continue this partnership would be disastrous. I have no desire to have the corporation, and told my brother he can have it, and to pay me out my shares when he has it. My brother cannot decide on what to do and its always a different story. I am at my wits end. My other option is to sell it to someone that is interested in purchasing my shares, and my question is; does my brother have to agree to this? Please note, there is no shareholder agreement in tact that specifies on selling shares.
1 Answer from Attorneys
This is the classic example of why shareholder agreements are so critical in business operations. While there is no obligation to have one, a properly prepared agreement would have addressed corporate governance (especially since you don't see eye to eye) and issues such as sale of shares, admission of new shareholders and even valuation of the shares.
In an ideal world, the business would have some agreement to address sale restrictions, but this situation is not ideal, and there is none. Before you assume absolutely nothing exists, though, check your incorporation paperwork, minutes of meetings or any other corporate documents to see if something exists that you don't know about. If none, it would seem that you are free to sell your interest to whomever you want and your brother just might find himself a business partner of someone he does not care to be in business with.
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