Legal Question in Business Law in California

S Corps.

I am a shareholder in a California S corp. The bylaws or the articles do not specify any buy sell agreement. I am a minority shareholder. I want to sell my shares. The other shareholders are not interested and anyone outside will not be interested in buying the shares. Do I have any recourse against the majority shareholders to force them to buy me out?


Asked on 1/24/03, 7:12 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: S Corps.

No, not if there was no irregularity in the original issuance of the shares, nor any agreement between the issuer (the company) and the investors covering repurchase.

Under some conditions a company that has issued shares without complying with the securities laws can be obliged to offer to repurchase. A lawyer with small-company securities expertise could examine the issuing company's procedures to determine whether there was a violation.

If you were an insider at the time you acquired the shares, you are much less likely to be able to find and use an issuance irregularity to your advantage.

Please contact me if you need further information.

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Answered on 1/27/03, 1:20 pm


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