QUESTION

I am in a company where I have 5% ownership proven by the tax returns. Can the other 2 owners just take back my 5% withoit my consent?

Asked on Jan 22nd, 2020 on Business Law - California
More details to this question:
The 2 owners are not happy that I have pointed out breach of contract toward a lender
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1 ANSWER

Appellate Practice Attorney serving New York, NY
The rights of the shareholders would be set forth in a shareholders' agreement, which might provide, for example, that the majority owners have the right to buy you out for a set price.  Absent a contractual provision allowing it, the other owners cannot simply confiscate your ownership interest.  Of course, a 5% ownership interest only entitles you (again absent a contrary contract) to a pro rata share of distributions.  It doesn't entitle you to be employed by the company or to have a say in the company's management.
Answered on Jan 22nd, 2020 at 11:09 AM

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