Legal Question in Business Law in Pennsylvania
I have a start up company that has run out of cash. I have found a company to partner with, and they will assume my overhead, and allow us to continue to operate. We will share our profits with them 50/50 in exchange for this arrangement.
I have investors, and they are threatening to sue me. I own 54% of the company.
2 Answers from Attorneys
As a Franchise Attorney I can advise as follows. You need to have a serious meeting with your investors. Explain the situation, the need for additional funding and the proposal made by the other company. Everyone needs to be on board with a major decision like this. As majority shareholder, you owe a duty to treat the other minority shareholders fairly. Consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
What type of entity is your company? Do you have documents that speak to who makes decisions?
Who is drafting the agreements with your new partner?
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