Legal Question in Business Law in Arizona

Shareholder agreements are not simple documents that fit into the category of a "fill in the blank" form. The are a number of issues/questions that need to be asked and answered in order to determine what agreement you should have with a minority shareholder. When you learn what the rights of a 5% shareholder might be, you may decide to give that person a different kind of interest in the company, rather than shares in the company. I would be happy to meet with you and discuss this situation and give you some general advice and counsel. In addition, I am available to serve as counsel for your 3 corporations or to act as part-time inhouse counsel if you have enough work to benefit from that kind of arrangement.

There are several questions about this transaction you need to consider, including where the shareholder lives, what the consideration for the transfer is, and why you have a shareholder rather than a lender with a promissory note, for instance. If you are not careful, your simple transfer of shares can trigger Securities Law considerations or internal control issues. It is better to start with the bare facts and move toward the best legal solution rather than take action before getting legal advice, then try to limit the damage. This Firm acts as corporate counsel for a number of Arizona corporations. Frequently, a short phone call to counsel can steer you in the right direction.

Law Offices of Donald W. Hudspeth, P.C.

3030 N. Central Avenue, Suite 604

Phoenix, AZ 85012

[email protected]

tele. 602.265.7997, ext. 106

fax 602.265.6099