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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 110574
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I just submitted the question
Submitted: 7 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 7 years ago.
-Could you explain your situation a little more?
-What is your question?
Customer: replied 7 years ago.
I am a Partner with 4 others. We gave majority shareholder to one Partner for preference status with Federal contracts. I was majority shareholder initially and I have the status also. We were in bed with a snake! He stole money and ruin relationships with vendors. He also went around our back and started a new company with another company. We have a non-compete in place also. Is there a PA that can remove him as majority shareholder? We want to get rid of him.
Expert:  Law Educator, Esq. replied 7 years ago.
You would have to sue him for breach of fiduciary duty and seek the damages from him. In order to remove him you would have to remove him in accordance to the bylaws of the partnership and if the bylaws do not specify removal, then you would have to ask for this as part of your suit for breach of fiduciary duty to take the majority shareholder from him. You will need to have your company attorney do this since you cannot sue personally on behalf of the business and it is the business that he has breached the fiduciary duty to.

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Customer: replied 7 years ago.
The company was started based on the preference status. He has resigned his position. Is there a provision that would allow a Partner to assume the status and be in compliance with the statues according to the Small Business Admin?
Expert:  Law Educator, Esq. replied 7 years ago.
You would have to name another minority status shareholder to take his place
Customer: replied 7 years ago.
I am aware of that. We are both disabled veterans. There has to be one of us in a controlling status. If he resigned I would have to be in the controlling status. He is trying to leverage his controlling status without operational responsibilities. This is in violation with the federal govt. The company was started on the premise and its existence. Is there a way to have a law make him relinquish the shares , so the company can continue it normal operations under the federal mandate?
Expert:  Law Educator, Esq. replied 7 years ago.
The bylaws of the company should specify buyouts and how they can be divested of shares, if there is no procedure, then you would have vote to change his shares from voting to non-voting shares so that he has no control or governence in the partnership. If there is no provision for that in your bylaws you would have to make a buyout offer and if he refuses, you would have to ask the court to order it and they will make a fair offer number he would have to live with.
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