QUESTION
I am a 40% shareholder in an S corp. I must take over the control or buy out my partner
Asked on Sep 08th, 2016 on Business Litigation - California
More details to this question:
The company was formed 60 / 40 without any partnership agreement, Just an S corp. I (the 40%) transferred to that newly formed S corp the totality of my inventory I had under another business I owned 100% and gave my partner (the 60%) all control over the new company which he moved from SoCal to NorCal. That was in Nov 2006 - The company has been declaring profit ever since and I'm paying income tax on my shares and it wasn't until 2 years ago that he finally paid me a fraction of my shares profit in dividend. Now I realize that he has been living and vacationing on company expenses. Even medicare. I want to take control or buy it back or force them to buy me out or sell me. They won't bulge. I want to enforce this legally and ASAP.
1 ANSWER
2 Awards
Would need quite a bit more detail to really be able to give you an opinion of whether litigation makes sense, but he does owe you a fiduciary duty as a minority shareholder. Is the majority shareholder an employee of the company and do you know what type of salary he takes? Is there a shareholder's agreement? Happy to get on a call to discuss with you.
Answered on Sep 08th, 2016 at 10:14 AM