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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41220
Experience:  Run my own successful business/contract law practice.
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I was waiting for you to reply to my reply and now nothing

This answer was rated:

I was waiting for you to reply to my reply and now nothing shows up on the site at all for an answer. This is the question about a minority shareholder.
Thank you for your post. Please permit me to assist you this afternoon.

My apologies but I do not see you question. How can I assist you?
Customer: replied 3 years ago.

Ok my husband owns a pizza franchise and his two daughters each own 4% of the business. He gave them these shares when they were minors. Now that they are adults, the parent corporation wants to get updated paperwork for all shareholders. One of the daughters is not speaking with her dad and we expect she will refuse to cooperate. What are his options if this happens? Can a minority stockholder gum up the whole process?


I am sorry to hear that you are in this situation. Indeed on person can 'gum up' the process if that person happens to be a legal owner. The best way to resolve it would be to review the articles of operation itself and see what it may take to formally remove one shareholder from the business, meaning what procedure the remaining shareholders would need to take to potentially buy out those shares and remove that person from the rolls. Otherwise their inactivity would hold off the other shareholders since the information that is being requested involved all owners to this business.

Good luck.

Customer: replied 3 years ago.

Well my husband is in the process of settling his property with his ex and there is no way at this time we can value what her 4% is worth. In the meantime if corporate can't get this paperwork,they can make trouble for him and his business. This seems very unequitable,he cannot afford to lose or default on the franchise agreement.


I am genuinely sorry to hear that. The other option is if the franchisor is understanding, he (your spouse) could inform them in writing of the current legal concern and request that they provide him with more time to formally obtain such information. But in this case the franchisor would have the discretion and the obligation to agree to waive this condition. Otherwise what I suggested (reviewing the articles) is the fastest, easiest, and in some way cheapest option available short of consent from all of the parties.

Good luck.

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