Legal Question in Business Law in New Jersey

S Corp partner differences.

Hello,

I formed an S Corp with my friend. Initially both of us were 50/50 share holders. Then we thought of taking advantage of the women owned small business benefits and so we filed for an amendment whereby my friend's wife would have 51% stake and I would have 49%. The next day after filing the amendment, they said they would like us to back out and that they want to do the business on their own. We had some differences and we talked but no decision was made. And the next day I learned from my attorney that they already asked to file another amendment to remove me as a partner. They did not even bother to ask me. I would like to know what rights do I have?

Thanks.


Asked on 1/29/07, 11:59 am

2 Answers from Attorneys
Robert Gleaner Robert A. Gleaner, P.C.

Re: S Corp partner differences.

It is not really clear whether this is a "start-up" business with no assets or liabilities or whether it's an ongoing company. If the company has nothing, why not just move on and let them have the company? If you cannot agree on even these basics, how will you agree on regular business decisions. If, on the other hand, there are assets to split up, that will need to be dealt with. In either case, you should have a lawyer.

Keep in mind that this advice is based purely on the little bit of information that you have given to me. There certainly may be other factors that would change my opinion. Further, no one can rely on advice from an attorney who has not been retained. Since it appears that you have not retained an attorney, you may want to contact an attorney (either me or someone else) to discuss your matter in more detail. Only then will you be able to rely on the advice. If you call me, mention Law Guru and your first one hour consultation will be free. Good luck! Rob Gleaner

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Answered on 1/29/07, 12:49 pm
John Corbett Corbett Law Firm LLC

Re: S Corp partner differences.

My answer would differ depending on the circumstances. You have rights even as a minority shareholder. However, whether those rights are worth enforcing depends on how much the company is worth, how much you have invested in time and capital, and what you have to gain or lose from the various outcomes and strategies. If you would like to discuss the specifics, call or email. The first consultation will be free for you.

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

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Answered on 1/29/07, 12:59 pm


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