Legal Question in Business Law in California
Partners don't want to buy my shares.
I am one of five partners of CA Corp. We agrue almost every single day and I am tire of it and want out. I offer to sell my shares to them and take a lost and get on do something else but they don't want to buy out my share. The business is in breakeven stage. I like to know that can I sell my share to anyone that is interested outside of the corporation.
Any advice will be appreciated.
1 Answer from Attorneys
Re: Partners don't want to buy my shares.
Generally, you can sell the shares to anyone--but be very careful that you comply with the exemptions applicable to the sale of unregistered securities. Also, be sure to comply with any restriction on sale written on the stock certificate or in any shareholder agreement you may have signed. As a practical matter, there are often no willing buyers for stock in a small or new company unless the shares being sold are enough to give the buyer control of the company--i.e., no one wants to pay money to buy the problems you are experiencing. If you have enough shares, you can explore the possibility of asking a court to dissolve the corporation which may result in a pay-out if the company has assets in excess of liabilities. At bottom, you should consult with not just a lawyer but also with a tax advisor to see what benefits or risks you face (e.g., if its a S corp, you could end up owing taxes on money allocated but not actually paid to you).