Legal Question in Business Law in Minnesota

I am a minority partner in a business and I also work as an employee with a weekly salary along with a commission on my sales paid monthly. My partners control the books making all financial decisions. They decided we were to put capital into the business, but in my opinion we are having a cash flow problem because we are paying all our bills to quickly. Before we receive payment from customers the vendors have been paid, therefore causing a cash fllow problem. Since I disagree with the management of the business I refused to put capital in. My check for commission, mileage, and expenses was held and I was told I had "pledged" the money and they will not pay my commission etc. until the company's cash flow improves. This money will be paid back to me in proportional increments as the company sees fit. Is this legal? This leaves me at their mercy. Since I refused to give them what they wanted, they took it from me and said I "pledged" it to the company. How far can they go? If they decide the company needs 50,000 do I suddenly "pledge" it and not receive any type of pay until they "feel" like it? Where is my protection?


Asked on 10/29/11, 3:42 am

1 Answer from Attorneys
David Anderson Anderson Business Law LLC

You need to have me or another experienced business law attorney review your corporate documents and agreements, including ByLaws and Stockholder Agreeements.

In Minnesota, if a minority SH is treated unfairly, he can petition the court for a complete DISSOLUTION and selloff of the company.

Drastic remedy, but strong protection for minority SH's.

Also, as an owner, you have the ABSOLUTE right to financials and corporate records of the company upon demand.

Call or email for further assistance. I am in Eden Prairie.

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Answered on 10/29/11, 4:22 am


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