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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 currently a shareholder and 'Officer' (Secretary) in a 'general business' chapter S corporation in the state of Missouri. The corporation is composed of myself and my three aunts as shareholders. I inherited my shares in this corporation when my Mother passed away four years ago. She was a shareholder and her shares legally had to pass to me as her only child and sole heir to her estate. I therefore ended up owning shares in the corporation which is essentially the 'family farm' in Missouri. Long story short and for many many arduous reasons, I never wanted her shares and have wanted to walk away from the corporation for some time now. I wish to relinqish my shares and to resign as an officer, without purchase or buy-out by the other shareholders, essentially giving them my shares. The other shareholders, again are my aunts who are elderly and for the most part irrational at many levels, will not accept my offer and/or will not take action upon my offer. The stock-purshase agreement for the coporation says that the corporation has the right of first refusal when a shareholder wants to be bought out. The offer is good for 30 days, after which, the shareholder may do whatever they want with the shares i.e. offering them to other individuals or entities. I have not been able to find other individuals or entities interested in the shares. So, am I stuck with my aunts and their corporation as a shareholder with no way out ? I want to simply walk away from this and give them my shares. If they take no action on my offer, and I cannot find anyone interested in taking the shares, do I actually have to seek legal council and take them to court or something to get out of this ? Many thanks for your time and also, for hearing me out, Benjamin Submitted by: Benjamin, Virginia 09/02/2009. Response: The first place to look is the corporation bylaws. They may contain a procedure whereby shareholders may voluntarily turn their shares back to the corporation. Other than that, sorry but nothing comes to mind. I am not aware of any provision in the Missouri Corporate Code granting a shareholder the right to demand his shares be redeemed by the corporation (similar to the voluntary withdraw of a member from an LLC). I'm not even sure the exact grounds of a potential court action from the facts given above (i.e., no management deadlock and no fact to the effect that the majority are taking actions harmful to the minority shareholder's ownership interest). It's a tough position. My suggestion would have been to disclaim the inheritance in the probate court but I suspect that option is no longer available. Posted By: JJR 09/08/2009. Add A Comment |
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