QUESTION
What happens when one partner out of two partners in a corporation wishes to leave the partnership but the other partner does not want to.
Asked on Nov 02nd, 2011 on Business Law - New York
More details to this question:
Due to incompatiblity as to the direction of the corporation and communication breakdown, Partner A wishes to leave and is asking for a payout worth far less than the business is worth. The Partner B flatly refuses to agree to any change of money because the Partner B does not want the Partner A to leave nor does the Partner B want to run the company solely or will not agree to be bought out by Partner A. Both Partner A & B are shareholders and equally own 50% of the shares.
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I agree your best bet is to sue for dissolution.
You can't just leave and start a competing business.
Answered on Nov 08th, 2011 at 2:12 PM
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Two equal stockholders in a corporation are not partners. A corporation is not a partnership.They are stockholders and have the rights provided to them by state law.
There is a provision in the corporation law of most states that allows either one of two deadlocked equal stockholders to sue for dissolution of the corporation. As a practical matter, these cases are nearly always settled by having one of the stockholders buy out the other. Failing that, the court can compel the corporation to be dissolved and its assets sold and the proceeds distributed. You need to see an attorney who practices business litigation in your state. We practice in this area and would be happy to consult with you.
Answered on Nov 02nd, 2011 at 11:17 PM