Legal Question in Business Law in New Jersey

Re: Amend or disolve a corporation?

Dear sir or madam:

Have your brother-in-law "sell" you his shares in the corporation. Amend the buy-sell agreement or shareholder agreement. Terminate any employment or officer's contracts between the corporation and your brother-in-law.

If you need assistance executing this tranfers, you may email me directly at [email protected].

Very truly yours,

Anthony S. Park

Re: Amend or disolve a corporation?

He can resign from his positions with the company and sell his shares back to the company. There should be a resolution adopted reflecting what has happened. He needs to sever all ties with the company.

Re: Amend or disolve a corporation?

You can accomplish what you wish with a minimum of difficulty. This type of occurrence happens very frequently in small family businesses.

Having your brother-in law sell his shares to you is the best method of transferring his ownership to you. If the company buys them (this is called a redemption) the transaction may give rise to undesired tax consequences. You can pay him for his shares now, or over time (an installment sale), as best meets your needs; your ownership of the shares can be immediate even if you pay over time.

To release him from liability, the corporation can give him a General or Specific Release. If he is concerned about future liability issues, the Company can also indemnify him for such matters for a period of time.

When he leaves the Company, he should resign from any employment position he holds and also as a Company Director. If he is the registered agent for the Company for State of New Jersey matters, he should also resign from that position. The State has to be notified of any change of the Company�s registered agent.

All of this paper work can easily be handled by your attorney.

Good luck .

Re: Amend or disolve a corporation?

I agree with the other authors, that the shares can be sold or merely transferred to you. The consideration can be their value, if you are paying him, or a gift to you. New certificates need to be issued to you, in either event and those issued to him cancelled. A formal resignation should be signed from him, resigning from all positions he may occupy (officer, director and/or registered agent) to take effect immediately when he signs the form (which can be just a simple letter from him). If he was registered agent, a new registration must be filed with the state. He can be released from obligations by a General Release from the corporation, but I suggest that the Release also state that it is given in consideration of his acknowledgement of any obligations for which he might be responsible, and an indemnification if he has not told you all of those things he caused obligations to be incurred. If he became responsible for any loans, guarantees, etc., these matters need be taken up with the lenders or credit issuers directly. If the corporation has elected subchapter "S" tax status, a new document continuing this status needs to be filed with IRS, which will need to be filed promptly after the transfer takes place. Finally, if you intend to qualify as a WBE minority business, special forms may also need to be filed with the state and other organizations or entities with which you do business to be recognized as such. If you need assistance with any of these forms, contact me directly.