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S-corp president powers are set forth in the company by-laws. Usually, they are limited to running the business. An officer is not empowered to change the capital structure (shares) without consent of all members. If it was 51/49, it would be different, since the 51 could outvote the 49. To change shares, the both shareholder signatures are required. The office of president is really irrelevant, since anyone (including a nonshareholder) can be president.
Can you get a copy of the bylaws?
President may or may not be able to shut the business. You need to check the bylaws on that one.
I can look into the bylaws.
So, if it's not in the bylaws then he can't do anything, strucure wise, to change the company??
He's pretty much threatening to shut the doors if we don't give him majority ownership
An empty threat. He has to buy you out.
President cannot change capital structure. That requires a vote of the shareholders.
thank you very much!!!
You have here what is known as a "freeze". Also called a deadlock. He cannot make a move without your consent, in writing. You should tell him that. The bylaws are only an issue on closing the company, I am not sure about that. If he does that and you suffer damages, then you can go after him. Keep all his emails, letters and record all statements that he makes.
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