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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37871
Experience:  Retired (mostly)
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how does an s corp with equal partners resolve a voting issue on the table

Customer Question

This is a general question but can be for company direction, transfer of shares etc
Submitted: 7 years ago.
Category: Business Law
Expert:  Jane Doe Deer replied 7 years ago.

Thank you for contacting Just Answer. I look forward to assisting you.


While we write back and forth, please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. Sometimes I'm unable to read your entire question until AFTER I write back to you.


Although it's usually five minutes, sometimes there can be a delay of an hour or more in between my answers because I may be researching the answer to your question, helping other customers, or taking a break. If we are writing late at night, I may have to go to sleep and resume helping you the following morning.


I need the following information before I can answer your question:


Can you please tell me what state is involved in your question? I cannot see it on my screen right now. I may need to research your state-specific law.


Does it say in the bylaws, articles of incorporation, or elsewhere what to do in this situation? If not, are you asking for suggestions?


I'll look forward to hearing from you,


Jane Doe Deer


Customer: replied 7 years ago.

The company is a Deleware Corp that does business in NY. The current by-laws were never completed (We need to retain an attorney to help us complete this as well) so there is nothing that outlines protocol in this situation. From what Ive heard the Pres or CEO decides the tiebreaker however that does not seem totally fair to the minority voting shareholders wspecially if he/she is not voting in the same manner (I'm not sure if this is accurate or standard practice



Expert:  Jane Doe Deer replied 7 years ago.

I have been having DSL computer connection problems. I have opted out so that another Expert can answer your question right away. I can't be of much help when my computer keeps crashing!



Expert:  socrateaser replied 7 years ago.

My colleague ask me to answer your question. A Delaware corporation's internal governance is controlled by Delaware law, regardless of the place where the corporation does business. Delaware has no tie-breaker law in the corporations code. So, if your bylaws do not make such a determination, then the only recourse, assuming that the board cannot decide amoungst itself, is to ask the court to appoint an independent board member to break tie votes.



socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37871
Experience: Retired (mostly)
socrateaser and 3 other Business Law Specialists are ready to help you
Customer: replied 7 years ago.
What if there are no board members?
Expert:  socrateaser replied 7 years ago.

Shareholders can call a meeting and elect a board. Majority wins.



Customer: replied 7 years ago.
I should have stated that this is a small business with only 4 partners who are the only shareholders (non public traded co). I was just wondering even if written in the by-laws as it should be what the fairest method or commonly used method in tiebreaker situations
Expert:  socrateaser replied 7 years ago.

The term "fairest" has no legal meaning. Scientifically, the fairest method of breaking a tie is to flip a coin, or use some other randomized method of choosing between two equally likely outcomes.



Customer: replied 7 years ago.
o.k. but is there a common method thats widely accepted in these cases?
Expert:  socrateaser replied 7 years ago.

To break a tie?


Yes. You could appoint a mutually acceptable person to break ties when they arise. Or, you can flip a coin. Whatever you do, you need to memorialize your choice of action in a corporate resolution, so that there is no dispute if and when a situation requiring a tie-breaker arises.