Legal Question in Business Law in Florida

Stocks

I started a business with a friend. We incorporated the business and choose officers. I being the president and him the vice president. We had a personal friend loan us 30,000. for start up. which the corporation repaid out of the business account. We verbally agreed that there was to be a 51/49 percent interest in the business. No stock certificates where issued to either party. All of the licenses loans and legal papers are in my name alone. He agreed to this at the start of business because of a divorce. We have no partnership agreement. We both absorb the tax loss on our K-1 every year. We have nevver turned a profit and are in debt which i must bail us out of everytime thru personal money and personal loans. After 7 years in business he has decided to leave without informing me in and timely manner. He wants me to buy out his stocks which he was never issued or wishes to sell them to a third party. Can I stop the sale to a third party? Do I have to buy him out or buy back his stock?


Asked on 3/12/04, 9:48 pm

1 Answer from Attorneys
Beth Clause Beth L. Clause, PLLC -

Re: Stocks

You definitely do not have to buy him out. I would advise doing an accounting of the business over the last seven years including all personal loans by you and see if you owe him anything at all. Technically since he is not on the corp. records as an officer or stockholder you dont owe him anything unless there is evidence to show otherwise. Beth Clause, Esq. 877-891-8152

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Answered on 3/13/04, 12:51 am


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