Legal Question in Business Law in Minnesota
3 years ago, my husband and 2 business partners began a business (S Corp) and accrued debt during the life of the business. Recently, these 2 partners have decided to pursue other career interests and �leave� the company. The company still has the debt on its books and owes repayment to a bank on a line of credit. The partners have become unresponsive leaving my husband as the only active employee.
What legal options does he have? Can he dissolve the company by himself? Is he responsible for 100% of the remaining debt?
2 Answers from Attorneys
If his business partners signed a personal guarantee, which most banks require with new businesses, they are each liable for the outstanding amount. As far as dissolving the company, he can let the company "die on the vine" so to speak. However, it depends on what your husband's intentions are with respect to the company. You should probably speak to an attorney that handles business matters because there are several variables that may be involved with your husband's situation.
It's all in the corporate documents, esp. the By-Laws, and any Shareholder Agreement or Buy-Sell.
I would need to review to advise.
Call or email for a free consultation.
I have 30 years experience as a Business and Corporate law attorney.
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