My husband and his brother each own 50% of the shares in an S-Corp. in PA. They were partners from 1982 until they incororated in 1998. I have played a major role in the business
for 28 years. I have been the Secretary/Treasurer since 1999 and on the Board since 2005. My Brother in-law married about 15 years ago and his wife has been trying to talk him into getting rid of me for the last 10 years. At our annual meeting last year he would not vote for me as a Director. However, I suspected that would be the case so I prepared myself by talking with our corporate attorney about our By-Laws and what to do if one of the Shareholders
votes for me and the other doesn't. Would that constitute a tie and, if so, how to break the tie. He said yes it would be a tie and you can't have a tie so one of the Board members would vote to break the tie. I am the only other Board member so I asked him if I could still do that. He said yes. So when he would not vote for me as a director and my husband did vote for me, we registered this as a tie and so I voted yes for me and broke the tie. We then voted for officers and we voted for my husband as President (removing my brother in-law as president), We voted for him as VP and I remained Secretary/Treasurer. This really upset him and he has been fighting this ever since. I got a second opinion from your site last year in this regard and your attorney agreed that according to our By-laws I would break the tie and stay on the Board. Since then my brother in-law has consulted an attorney that says this was not lawful and if he doesn't want me on the Board he should just vote for himself and my husband would be forced to vote only for himself, thereby removing me from the Board. At past annual meetings they always voted yes or no for each person but his attorney says not to do it that way, vote all of his shares for himself. Since there would be no way for me to get a majority I would be out. Then the two of them would make up the Board and they would have a stalemate over who the officers would be, because my husband would vote for himself to be President, his brother as VP and me to remain S/T. His brother will vote for himself to be President and my husband to be S/T and not vote for me at all. At this point I don't know what to do. I can't believe that my brother in-law would let his wife's hatred for me come between us to this point. I also can't believe that I can be put out just because he wants it that way. He and my husband own this business 50/50 and I have been instumental in the decisions od this business for 28 years. Is there anything I can do to protect myself from being put out. I still think our By-laws override what his attorney says but then I am not an attorney so I can not be sure. Unfortunately our corporate attorney has washed his hands of us because he has been our attorney from day one and he can't believe we are having this problem getting along. My brother in-law's wife called him several times in a rage over things and he finally told us that he would not get involved any further. We have not gotten a new corporate attorney because my broth in-law will not agree to one. My husband and I do not want to have anything to do with getting an attorney of our own, we were always hoping he would come to his senses. We want to do things legally but we also want to protect ourselves. Can you give me some advice? If you need to see our By-laws I can upload them for you to look at. I must admit that when we incororated none of us knew how to operate as a corporation
. Now I am not sure that our straight yes or no voting for Directors was the right way to do it, but that is the way we have done it every year. All these past years we never had a problem, we always agreed. Now what do we do?