QUESTION
If I am a owner/stockholder of a company, hold no position with the company (director, officer or employee) can I legally work for another company?
Asked on Nov 04th, 2011 on Corporate Law - Nevada
More details to this question:
I made an investment into a corporation to be a stockholder of the company. I have no roles or responsibilities with the company, to clarify I am not employed with the or hold no Director or officer slot, silent stockholder. Are there any legal issues with me looking to work with a different company in the same industry? Both companies at the moment are not competing for customers. Do i need to disclose to future employers within that industry that I am a stockholder? Is this situation comparable to owning stock in a company you left to work at a new company in the same industry but retain the stock? If the company I own begins to compete with the company I am employed with, what are the legal recourse''s to expect, is it illegal, do i need to sign a nondisclosure agreement with my employer?
1 ANSWER
R. Christopher Reade
In most instances, passive shareholders have no duty of loyalty or exclusivity to an entity in which they hold an equity stake. Nonetheless some closely held companies have exclusivity or non-competition covenants as part of their bylaws or operating agreements. You should verify regarding whether you have executed any covenants as part of your ownership interest.
Answered on Nov 16th, 2011 at 11:19 PM