Ask a Business Lawyer. Get Business Law Questions Answered ASAP.
What is the legal status of the company? A partnership, a corporation or what? Do you have an operating agreement or by-laws, or is it just a "gentlemen's agreement" as to the rules of operation?
No I am sorry is is an S-Corp. I am 50% shareholder, treasurer and secretary. He is president
He has twice as many sales as me, thus the dispute
Do you have an operating agreement or by-laws, anything that rules on what happens if one person "wants out"? There should be rules about non-competing and so on. Do you have anything like that?
No, I don't believe so
I don't really "want out" I actually love the business we have built
I do all of the non-sales work too. But I know that is probably irrelevant to a shareholder issue
But you said he wants to lowball your shares and dissolve the company. That's what I was talking about/
Yeah, between my mom and I, I have $11,000 in debt to the company. I have been floating the company along...
I have never been paid
and He is offering $7,000 to sign over all my shares
So the company will still owe me $4,000 plus sales commission
does your company have a rule against this? Usually one cannot just force someone out and dissolve a corporation. It is its own legal person. Who makes the decisions about payments and so forth? Why aren't you getting paid but he is?
I have been sacrificing for the company. He has a family and kids. I am single and living off savings
I paid his rent 3 weeks ago
You need to take a stand and tell him that due to the company owing you money, he will not receive a salary until you are paid off and then you need to make a firm agreement about the customer list (client list). If you have no operating agreement about non-competing, he can quit working there, still own the shares, but start another company somewhere else.
and instead of "thank you" he has taken over the company completely (once I taught his wife how to do scheduling and computer work) Of course I taught her not knowing as soon as they knew how to do my job they would cut me out of the company
Yes, I agree that would be the best solution. If he quits. Because I can run the company profitably while it is not able to pay his lifestyle
Unbelievably, this happens frequently. Is there a way you can get back in? Does his wife work there? How does she have access?
You need to stop funding him right away.
I know I need to take a stand, but he has now removed my password XXXXX our phone system (which I set up) and our customer database, scheduler
Oh I am definitely stop funding..
But assuming he really comes up with $7,000... I don't know if I should just take it. Even though all my sweat equity is gone
And theoretically he will continue to pay the remaining balance and sales commision
You can consider a civil lawsuit, but it would cost money and you would get...what from him? it would not be worth it. I think you need to cut your losses and get rid of this creep. You have the know-how and start your own business with employees and a firm set of rules and contracts.
Yes. Thanks. I agree. I really am handing this guy a ton of value but if he is not careful he will lose it anyway..
Oh I must go
I wish I had a law to point to to "get him" but it sounds as if he's wrecked your business and that's what honest people get out of working so hard, sometimes. He's a jerk and immoral, cut your losses.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).