Partner recourse
Two owners own 50% each in an S corp, One willfully leaves the company and starts another venture, has not participated or drawn pay for over four months. Terms of the buy out have become a problem. There is not a ''no buy, no sell'' in place. What recourse does the remaining partner have?
Asked on 5/17/08, 7:33 pm
2 Answers from Attorneys
Bryan Whipple
Bryan R. R. Whipple, Attorney at Law
Re: Partner recourse
Oh, I forgot to say in my previous answer, if you can't legally sell additional stock as a 50% owner, for whatever reason, another possibility might be to sell 1% of your stock to a third person, this necessitating a third director.
All of this is pretty tricky legally, and let me make it clear that I don't advocate cheating co-promoters of a business, but if the person has abandoned their role, there's a fair chance that these measure will not be opposed and you will just be taking technical procedural steps to get control.
Answered on 5/18/08, 1:03 am
Bryan Whipple
Bryan R. R. Whipple, Attorney at Law
Re: Partner recourse
Oh, I forgot to say in my previous answer, if you can't legally sell additional stock as a 50% owner, for whatever reason, another possibility might be to sell 1% of your stock to a third person, this necessitating a third director.
All of this is pretty tricky legally, and let me make it clear that I don't advocate cheating co-promoters of a business, but if the person has abandoned their role, there's a fair chance that these measure will not be opposed and you will just be taking technical procedural steps to get control.
Answered on 5/18/08, 1:03 am
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