Legal Question in Business Law in Michigan

Re: Can I force to buy a 1/3 partner out of his shares if I own 2/3?

The ability to require a shareholder to relinquish his or her shares of stock must come from a written agreement. These often are referred to as "buy-sell" agreements, because they govern how the shares of stock may be bought and sold.

If no agreement to require the sale of the shares exists (or if the "buy-sell" agreement exists but does not authorize a "forced" sale), then no shareholder can require the other to sell or surrender his/her stock. If the shareholders cannot continue to conduct business, however, then a shareholder may commence a lawsuit to dissolve the corporation. In a dissolution, the assets usually are sold, at fair market value, and the proceeds are distributed to the shareholders, after administrative expenses and other costs are paid.

Often, shareholders consider the ramifications of dissolution and reconsider whether to sell their shares of stock, rather than risk receiving less upon a sale of the assets.

This response is not intended as legal advice. Your rights and obligations will depend upon the particular facts and circumstances affecting this matter. You should consult an attorney in your area to discuss all of the relevant facts and circumstances. No attorney/client relationship is created as a result of this response.

Feel free to contact me by telephone, if you wish to discuss this matter.