Legal Question in Business Law in New York

Re: Percentage Ownership

You would need a specific agreement drafted and executed by the parties that included a clause giving her the control and power to exercise such an option. We have substantial experience handling these types of cases, however, we would need some more information before making a complete and proper determination. You are welcome to contact us for a free consultation.

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Re: Percentage Ownership

This depends on how the organization is structured and the written agreement between the owners. Find a lawyer who will draft her agreement, whether an operating agreement, shareholders agreement, or partnership agreement. If your wife wants to keep control over the sale of the company, make sure the lawyer includes a "drag-along" provision, or its equivalent. This will ensure that she can sell the company and automatically include her minority partner's ownership in the sale.

Re: Percentage Ownership

The answer to your question depends on the content of the shareholders/members agreement for the company.

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Re: Percentage Ownership

No.

Several years ago I was representing a gentleman who owned a house and wanted to give a percentage to his nephews yet retain control. He retained a stupid lawyer that created a partnership giving my client 80% and the nephews 20% The stupid lawyer assumed that greater percentage in a partnership equaled greater control. Wrong.

Under law each partner is deemed to have equal control and authority over the partnership (unless the partnership agreement states otherwise). This is different than a corporation where ownership is based on shares with voting rights. More shares means greater voting power.

So, to answer your question. As a partnership, and unless there is a partnership agreement that states otherwise, 10% of the company means that if the company sold for $100, the partner receives $10 and your wife receives $90. However, both have equal control.

Mike.