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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: How do I go about dissolving an Indiana Corporation (not an S-corp.)? I have 50% interest but I have financed the company about 80-90%. The other shareholder is my sister and she has major trust issues even though she is gaining profit and I am losing. Please I have had enough and this is a service corporation. Response: You cannot voluntarily dissolve a corporation without a majority of the directors and shareholders approving of the dissolution. See Indiana Corporate Code on voluntary dissolution of corporation. There is a provision in the Indiana Corporate Code for seeking a judicial decree that the management of the corporation is deadlocked and, thus, the corporation should be dissolved despite the fact that a majority of the shareholders and directors have not voted dissolution. IC 23-1-47-1(2)(B). This may be the place you find yourself but the cost of hiring a lawyer to sue for dissolution might be cost prohibitive. I am a little confused on how your sister could be "gaining profit" and you are "losing" if you are both 50% shareholders. Be that as it may, you want out. It is a service corporation meaning the real value in the business is in those who provide the service. If the corporation lacks substantial assets, withdrawal might make sense. Would your sister buy your 50% interest out for nominal consideration? You would then be free to set a rival service corporation. I'd also speak with a tax professional about the tax implications of whatever move you make ahead of time. They could play a significant roll in the decision. Submitted: 6-25-2007; Chris, IN Response: 7-13-2007; JJR Add A Comment |
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