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Ask a Lawyer -- Corporations
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Brought to you by MedLawPlus.com®-- Corporate Bylaws and initial board of directors resolution Price: $14.99 (free trial) |
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Question: I am a 29% minority shareholder in an Florida S-Corp. I am also VP/Treasurer and handle all the books. My partner owns 71% and she is basically dissolving the business. Am I allowed to withdraw my 29% interest from the bank accts. based on yr. end inv., $$ in bank/equipment, etc.? Response: "Basically dissolving the business"? I assume you are saying that the majority shareholder is liquidating assets / winding up the affairs of the business; however, a formal resolution to dissolve the corporation has NOT been approved by the board of directors and the shareholders. As I assume the majority shareholder controls the board of directors as well, under Florida law the majority shareholder would be able to pass a resolution authorizing dissolving the corporation. See Florida Statute Section 607.1402, Dissolution by board of directors and shareholders. Am I allowed to withdraw my 29% interest from the bank accts. based on yr. end inv., $$ in bank/equipment, etc.?. No. Distributions to shareholders are made through resolution of the board of directors. This applies to you to the same extend it applies to the majority shareholder. Furthermore, all distributions (i.e., dividends) from the corporation should be proportional to all shareholders. If the majority shareholder is intent on liquidating the business, then I would approach her regarding proportional liquidating dividends to the shareholders of cash on hand. However, be careful to pay off all debts of the corporation (or leave sufficient assets in the corporation) prior to making liquidating dividends. Shareholders of a dissolved corporation can become personally liable for unpaid claims against the corporation. See Florida Statute Section 607.1406(12), Known claims against dissolved corporation. Finally, it is in the interest of all shareholders of your corporation to follow the formal requirements for dissolving your corporate charter with the Florida Secretary of State's office. Here is a link to the form used to dissolve a Florida corporation. Submitted: 3-31-2006; Denise, Florida Response: 4-4-2006; JJR Add A Comment |
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