Legal Question in Business Law in New York

Can I be removed?

I am the vice president for a small company, my partner and I started it less than a year ago, He wants to apply for a SBA loan we plan to make his wife president of the company so that we may speed up the process of getting the loan from 2 yrs to only 1, I was interested to know if there is anyway that I can be removed from the picture, and the two of them continue on with out me. Are there any loop holes I should be aware of.

thank you

Asked on 4/18/99, 11:35 pm

1 Answer from Attorneys

Patrick Begos Begos & Horgan, LLP

Re: Can I be removed?

The answer is, "it depends." If your company is a privately-owned corporation, then the shareholders have the ultimate control. If you own less than half of the stock, then you certainly can be removed from the picture. Even if you own 50%, there are possible adverse consequences that can occur.

I suggest that you seriously consider entering into a shareholders' agreement with the other shareholders in order to protect yourself, and the business, from problems in the future, *especially* if you are looking to grow the business through borrowing, etc.

If you are interested, I also practice in NY. You can e-mail me and we can discuss further.

Patrick Begos

Begos & Horgan, LLP

25 Ford Road

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Answered on 4/20/99, 9:02 am

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