 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
   |
|||||||||
|
|
Ask a Lawyer -- Corporations
|
|||||||
|
Brought to you by MedLawPlus.com®-- Corporate Bylaws and initial board of directors resolution Price: $14.99 (free trial) |
|
Question: I am 50% owner of an Alabama S-Corporation. I have moved and drive into work for 3 days at a time (partner requires me to put in 40 hrs. per. week or I cannot draw a pay check)I also handle operations on our server via the internet. I have employees to do our day to day. My partner is offering to buy at a discounted rate and threatening to dissolve if I do not accept his offer. What is the likely outcome or way a judge would choose to dissolve? Response: Voluntary dissolution of a corporation under Alabama law requires 2/3rds shareholder approval. Section 10-2B-14.02. In Alabama, the grounds for judicial dissolution (i.e., where a lawsuit is filed asking a judge to dissolve the corporation) are as follows: (2) In a proceeding by a shareholder if it is established that: (i) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock; (ii) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent; (iii) The shareholders are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired; or (iv) The corporate assets are being misapplied or wasted. Section 10-2B-14.30. The claim of the other shareholder will be that the corporation's management is deadlocked but he must also show that some sort of injury to the corporation is likely to occur from the deadlock. Your facts given above are not enough to even suggest what the outcome might be. However, I can say such a lawsuit would be an expensive endeavour and do not believe corporate funds could properly be used by either shareholder to fund the lawsuit. The lawsuit would be filed in the name of the shareholder who wishes to dissolve the corporation and, as such, it is a personal expense of that shareholder in my opinion. Submitted: 09/03/2007; Bob, Alabama Response: 09/04/2007; JJR Add A Comment |
Ask a Lawyer, Corporations Archives
DISCLAIMER The above is provided for informational purposes only and is NOT to be relied upon as professional advice. The information presented on this site comes without any warranty of correctness and, therefore, should not be relied upon. This service is not a substitute for the advice of a professional. No attorney client relationship is created through use of this site.
Home | Site Map | Library | Ask Atty | Privacy
Plastic Surgery | Divorce Lawyers | Legal Forms
MedLawPlus.com, Inc.
St. Louis, MO
Copyright 1999 - 2009 / Patent Pending
