Hi there. I can certainly understand your frustration with this situation. Let me see if I can help.
Your business partner owes a fiduciary duty to the corporation and her fellow shareholders. By appropriating corporate assets for her own personal use and conducting business outside the corporation, she is breaching that fiduciary duty.
I would send her a letter - certified, return receipt requested - explaining the history, informing her that you consider her in breach of her fiduciary duty to the corporation, demanding what it is you want her to do, including that she cease and desist in any activities that continue that breach, and finally telling her that if she does not comply immediately, you will have no choice but to pursue any and all legal and equitable remedies through the judicial system. You could also throw in something about appropriating corporate assets for personal use as constituting theft.
I hope this has given you the guidance you were seeking. I wish you the best of luck!
The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
Normally a sale of all, substantially all or significant assets outside the ordinary course of business requires a super majority...2/3 vote rather than a simple majority. You would have the right to sell assets in the ordinary course of business, but otherwise would not. But, as only a 50% owner, your partner does not have the right to sell assets outside the normal course of business. The fact that she has consummated such sales is another breach of her fiduciary duty to the corporation and fellow shareholders.
After the letter, you will need to pursue this through the court system. You could immediately seek an injunction against her for her conduct. Also, you could seek a judges order compelling the phone company to take action. If you are not in a position to pay a lawyer, I would recommend you contact your local legal aid clinic or sometimes a local law school can help out. You might also contact the police department and file criminal charges against her for stealing corporate assets. I wish you the best of luck.
Good evening to you. If the corporation is essentially insolvent with no assets and you have not personally guaranteed the lease, there really is no reason to pay $2,000 personally to get out of the lease. You don't really even need to file bankruptcy for the corporation. If you default on the lease, she will need to get a judgment against the corporation and then she has to collect it. If the corporation has no assets against which to collect a judgment...1) she likely will not pursue the costs of obtaining and and pursuing collection of a judgment that is uncollectible, and 2) even if she does, there is nothing to collect.
First, do not dissolve the business....the corporate dissolution documentation requires that the shareholder make a representation that the obligations of the corporation have been provided for....the result of that would be to potentially open you up to personal exposure to liabilities that would otherwise be restricted to your corporation.
Second, I would not jump into personal bankruptcy yet. The money that you owe personally must be committed to a judgment and then collected. Many times being judgment proof is sufficient to keep the creditors from coming after you aggressively. If they do, you can then always seek bankruptcy protection to get these judgments erased.
Third, if your partner's new business becomes successful, you should still consider filing a civil suit against her and her company for breach of fiduciary duty and conversion of corporate assets and opportunity to her own personal good. You must file this suit within the applicable statute of limitations period.
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