QUESTION
Can my friend file the annual report and claim him as the president without my permission?
Asked on Sep 08th, 2015 on Labor and Employment - Massachusetts
More details to this question:
I and my friend created an S corporation in 20xx. I was the president of the corporation and my friend was the secretary. I was living with him at the time and paid my rent every month. In late 20xx he was having financial trouble and I lend him few thousand dollars. He promised me to give my money back on a certain date. The day he was supposed to pay me back instead of giving my money back he accused me of raping his wife. He and his wife made up the whole story so they won't have to pay me back and I was charged with rape. I have the proof of giving him money as a loan. Previous year I filed the annual report. But after I was charged, my friend filed the annual report of the corporation and named him as a president without my permission. Few months later he sold the business without my permission. My question is: can he file the annual report and claim him as the president without my permission? Can secretary become president without president’s approval? Is there any legal steps I can take? Thanks.
3 ANSWERS
Your personal history with your business partner is irrelevant to your question. The quick answer that the company's by-laws determine what each member or share-holder of the company can and can't do. It should also outline the responsibilities of each officer. Generally, some officer needs to submit the required reports to local and state government agencies. Also generally, if the by-laws don't mention the conditions under which the company can be sold or dissolved, any member or share-holder can sell the company and, after paying off all the company's debts, divide the profit between the other members or share-holders.
Answered on Sep 08th, 2015 at 10:44 AM
You should consult with a corporate attorney. I am not confident I can give you a reliable answer. Where is the stock? Every for profit corp, including an S corp, has stock The stock holders vote for officers, and the stock is sold, not the corp. PS: S-corp is not a type of corp. S-corp is an IRS election, done for tax purposes. This answer is based on GA law. If you are not in GA, resubmit your question and identify your state. The laws vary from state to state.
Answered on Sep 08th, 2015 at 10:43 AM
Appellate Litigation Attorney serving Boston, MA
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It depends - did you have any agreement between the parties when the S-corp was founded? Go see a lawyer to sort this out. GOOD LUCK.
Answered on Sep 08th, 2015 at 10:42 AM