Legal Question in Business Law in Minnesota
In an S Corp with two co-owners, each with 50% shares, "Dan" has been "misappropriating" funds and refusing to provide financial information to the other owner, "John".
A few months ago Dan set up his own S Corp offering the exact same service, and is (presumably) stealing clients since he handles all the sales for the shared corp. When confronted, Dan denied everything and refused to agree to a buyout without a hugely unrealistic buyout price. How can John get Dan out of the corporation?
Background - Inc in state of MN, BOD has three members: the two owners, plus the wife of the owner who is the problem.
2 Answers from Attorneys
You need to hire an attorney immediately. This can be a very tricky situation, and the attorney will need more facts before advising you. Feel free to call if you would like to set up an appointment.
An attorney will tell you that without a prior buy-sell shareholder agreement in place, getting Dan out is not going to be easy. Unless, of course, you want to pay his unrealistic buyout price. That's why it's always a good idea to consult with an attorney before starting these ventures, so various "what if that happens?" type questions can be foreseen and addressed. Consult with a business attorney in your area for specific advice.
Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise
Franchise Attorney
Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise
Franchise Attorney
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