Legal Question in Business Law in Arizona

liabilities after the signing of the tranfser of shares

I have recently sold my 1,500,000 shares (15%) back to the company which is a s-corp. According to the shareholders agreement the company must pay the note by DEC. 31, 2005. The company gave me 10% down and still owes my the remainder. The company is not doing too hot and I wanted to know what are my liabilities if the company goes under? Am I still vulnerable to lawsuits and bankruptcy or am I safe becuase we have signed all the paperwork and I am currently not involved?

Thank you.


Asked on 8/12/05, 1:28 pm

1 Answer from Attorneys
Donald Scher Donald T. Scher & Associates, P.C.

Re: liabilities after the signing of the tranfser of shares

Right now, you are a creditor of the company and not an owner. The reason to incorporate is to limit the owner's liability to his investment in the corporation. Thus, if a judgment is taken against the corporation, it does not extend to a shareholder. So, whether you are a creditor or former shareholder, any claim against the corporation is limited to the corporation and its assets. If you think that the company is not going to pay what is owed to you, you should consider going to company and give them a discount to pay you now.

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Answered on 8/12/05, 5:00 pm


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