Legal Question in Business Law in New Jersey

That is not an easy question to answer. The best way to approach it is to recognize that involvement in a corporation consists of different sets of rights and duties. Simplified, the shareholders are owners and have a property right. The directors and officers are fiduciaries (trusted agents) who have the responsibility to manage the corporation for the benefit of the corporation as an entity and the resulting benefit to the shareholders. A shareholder cannot usually be forced out. However there are ways (some of them unlawful) in which a shareholder can be squeezed out by making continued ownership dificult. These issues set up very differently in S-Corps and C-Corps. If you are having a problem with corporate ownership, don't make any changes until you explain your situtation to a lawyer and get some competent advice.

See also: http://info.corbettlaw.net/lawguru.htm

You need to sit down with a lawyer and figure out what your options are.

Robert Davies, Attorney

201 820 3460

To simplify my colleauges' answers, a shareholder in a corporation has various rights and responsibilities based on the bylaws of the corporation and the laws of the state of incorporation. Generally speaking, a shareholder cannot simply demand that another shareholder leave. Nor can a shareholder simply leave himself/herself.

It seems that you and your partner don't get a long, therefore you should consult with an attorney as soon as possible to begin the process of protecting your business and planning for a transition. The goal would be to minimize negativity, maximize equity and allow everyone to move on with their lives in the smoothest possible way.

Feel free to contact my office at your earliest convenience.

Roman R. Fichman, Esq.

www.TheLegalist.com │ @TheLegalist

email: Info (@) TheLegalist (dot) com

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Disclaimer: This post has been written for educational purposes only and was not meant to be legal advice and should not be construed as legal advice or be relied upon. The post may contain errors, inaccuracies and/or omissions. You should always consult an attorney admitted to practice in your jurisdiction for specific advice. This post may be deemed as Attorney Advertising.

A shareholder's interest in a corporation is represented by shares of stock. Stock is personal property. You can no more tell a shareholder to "leave" the corporation than you could tell that shareholder to "leave" his lawnmower. Of course, if you consulted with an attorney with respect to a shareholder agreement prior to the problem arising, the situation could have been anticipated and planned for. You may have some options, but it will require more than an email chat. As H.L. Mencken said, �For every problem there is a solution that is simple, neat and wrong.�

Kindly note and remember that my response is merely a general comment on the law related to your question, and NOT legal advice or opinion. Also, your question and my response does NOT create an attorney-client relationship between us. You cannot rely upon what I have written, because I do not have all of the information that I need to advise you or render an opinion. Even simple facts you have not shared can completely change my answer. For me to give you legal advice or opinion, you would need to hire me to be your lawyer, and then we would need to discuss this in detail and go over the documents.

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