Legal Question in Business Law in California
Who controls the sell of a corporation
We are incorporated in Ca. Two shareholders, one with 51%, one with 49%. The 51% owner has an offer to sell the business, can he sell the company even if the 49% owner does not want to sell?
2 Answers from Attorneys
Re: Who controls the sell of a corporation
Such disputes are resolved by following the rules of the company established in the by-laws. Review them. If you still can't resolve the dispute and need legal counsel, feel free to contact me. I've been doing this for over 30 years.
Re: Who controls the sell of a corporation
Is the proposed sale a sale of the corporation (i.e., the shares of the corporation) or the assets of the corporation. If its a sale of the shares, generally a 51% shareholder cannot force a 49% shareholder to sell his shares, unless there is some shareholder agreement between them stating otherwise. If it's a sale of the assets of the company, it will (as Mr. Nelson points out) depend on whether there is any language in the corporate by-laws or in any other agreement preventing such sale. Otherwise, the 51% owner has control, although he would have to go through proper corporate procedures.
You are welcome to contact me if you can't resolve this between yourselves.
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