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Ask a Lawyer -- Corporations
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Question: I want sell all my shares in an s corp. I am vp and own 331/3% of the shares. The remaining shareholders are asking me to contribute 30K or sell shares back.I'm not sure what my options are. I've invested over 100k and would like to be bought out. Response: The problem with closely held corporations is the lack of a ready market for the shares. A shareholder cannot force a corporation or other shareholders to buy his shares absent a buy-sell agreement which grants the right of a shareholder to withdraw thereby triggering a buyout. As you have not mentioned a buy-sell, I assume one is not in place. Thus, it's all up to what you can negotiate with the other shareholders. It would be unusual for any party outside of current shareholders of a closely held corporation (or possibly employees who currently don't own shares) to wish to purchase shares. Unless I do not understand the facts, your options are quite limited: hang in there or sell to existing shareholders or the corporation. "The remaining shareholders are asking me to contribute 30K." I assume the corporation is in need of additional capital. A corporation cannot force shareholders to contribute additional capital. What the majority of shareholders / directors can do is authorize the corporation to raise additional capital. This might mean your ownership interest gets diluted if the other shareholders purchased newly issued shares from the corporation while you refrain from participation. Submitted: 02/03/2008; Sheila, Florida Response: 02/05/2008; JJR Add A Comment |
Ask a Lawyer, Corporations Archives
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