Legal Question in Business Law in California

Re: Member of the Board

You can resign from the board by giving written notice to the corporate secretary, the chairman of the board, or the president. Your brother almost certainly fills one or more of these positions.

Board membership does not, in itself, affect ownership of the corporation. Your brother's premise about minority ownership appears to be flawed.

Directors are not automatically entitled to be paid for their services, and in small businesses usually aren't paid. Some bigger corporations do pay their directors hefty expense allowances or consulting fees, but unless you actually performed services for your brother's business you should not expect a salary or fees.

If, in addition to being a director, you were also a stockholder, you could be entitled to dividends or a distribution of profits.

Over the course of 15 years, most corporation's directors would have been required to stand for re-election. It's possible you are no longer on the board because you were not re-nominated and re-elected. You should read the corporation's bylaws concerning annual meetings and election of directors.

Corporate directors have a duty to keep informed of the corporations's affairs and to attend meetings regularly. As a director, you can be hald personally liable for corporate misconduct, and your liability exposure is greater if you have not kept informed of the corporation's affairs and participated in meetings.

You are entitled to inspect and copy the corporation's books, minutes and other records.

I suggest you inspect the records, with the help of a local lawyer if you feel uncertain about what to look for, and determine what actions have been taken affecting board membership, dividends, filing tax returns, audits, etc., then disengage yourself completely from the business.

Re: Member of the Board

Mr. Whipple's reply is accurate. I would only add that if you are a shareholder, you are able to pursue other issues of minority shareholder rights, forced sale of the shares, corporate dissolution, etc.

If you are in Southern California and in need of further assistance, don't hesitate to contact us.

Best of luck.