How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Law Pro Your Own Question

Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24427
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
11688690
Type Your Business Law Question Here...
Law Pro is online now
A new question is answered every 9 seconds

There are 2 separate existing companies. Company A - 8 people

Resolved Question:

There are 2 separate existing companies. Company A - 8 people signed a shareholders agreement with 2 assumed brands attached to Company A at the time of signing.

Company B is owned by 2 of Company A's shareholders.

Company A is dissolving due to conflict between shareholders.

Since both companies produce the same product under different brands, and 2 of the shareholders of Company A own Company B. They are assuming that the Brands under Company A will become owned by Company B.

Meanwhile Company B has been offered a sum of money to market an assumed Brand of Company A.

My questions is ... if Company B accepts monies for a brand assumed to still be part of Company A (while the company is in dissolution) would this be legal, and wouldn't these monies and any profits technically belong to Company A until the dissolution is final?
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Pro replied 1 year ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete excellent answer for you.

My name is XXXXX XXXXX I'm going to assist you with your question.

Please bear with me if you believe my answer isn’t coming fast enough because I’m also working with other customers too. I apologize for any seemingly late response.


The remaining 6 shareholders of A are entitled to maximize the monies they receive upon A's dissolution.

As such, the brands of A should be sold or otherwise negotiated to maximize the return to the shareholders of A.

A corporation may also be dissolved by its board and shareholders.

The Board must propose and recommend dissolution to the shareholders. In the alternative, the Board may determine that it has a conflict of interest or that special circumstances exist which dictate that no recommendation can be made. In this case, the Board must tell the shareholders the basis for its determination. The Board may condition its proposal for dissolution on any basis.

The Board’s proposed dissolution is then submitted to the shareholders at a duly noticed shareholder meeting. All shareholders, whether entitled to vote on the Board’s recommendation or not, shall be notified of the meeting. Notice shall be timely given and the Notice shall state that one purpose of the meeting to vote on the dissolution of the corporation.

The shareholders vote on the proposed dissolution at the meeting. The proposal must be approved by the holders of a majority of the outstanding shares of the corporation entitled to vote.

If the dissolution is approved, a Certificate of Dissolution is filed.

Finally, if there is a shareholder agreement regarding dissolution that complies with §450.1488 of the Michigan Business Corporation Act, then the Shareholders can dissolve the corporation.

The corporation is dissolved when the Certificate of Dissolution is filed with the Michigan Department of Consumer and Industry Services. However, the corporation’s existence is continued for the purpose of “winding up” the affairs of the corporation.

During the winding up period, the corporation may only:

1. Collect its assets.

2. Sell or otherwise transfer assets which are not to be distributed in kind to its shareholders.

3. Pay its debts and other liabilities.

4. And do all other acts incident to liquidation of the corporations business and affairs.

During the winding up process of a dissolved corporation, its officers, directors and shareholders continue to function in the same manner as if dissolution had not occurred and title to the corporation’s assets remains in the corporation’s name until they are transferred. Shares may be transferred and the corporation may sue and be sued in its corporate name. Dissolution does not abate actions brought against the corporation prior to dissolution.

Corporate dissolution does not change quorum or voting requirements for the board or shareholders, and does not alter provisions regarding election, appointment, resignation or removal of, or filling vacancies among, directors or officers, or provisions regarding amendment or repeal of bylaws or adoption of new bylaws.

- See more at: http://corporations.uslegal.com/corporate-dissolution/michigan-corporate-dissolution-law/#sthash.Zo0NKz21.dpuf
A corporation may be dissolved by its board and shareholders.

The Board must propose and recommend dissolution to the shareholders. In the alternative, the Board may determine that it has a conflict of interest or that special circumstances exist which dictate that no recommendation can be made. In this case, the Board must tell the shareholders the basis for its determination. The Board may condition its proposal for dissolution on any basis.

The Board’s proposed dissolution is then submitted to the shareholders at a duly noticed shareholder meeting. All shareholders, whether entitled to vote on the Board’s recommendation or not, shall be notified of the meeting. Notice shall be timely given and the Notice shall state that one purpose of the meeting to vote on the dissolution of the corporation.

The shareholders vote on the proposed dissolution at the meeting. The proposal must be approved by the holders of a majority of the outstanding shares of the corporation entitled to vote.

If the dissolution is approved, a Certificate of Dissolution is filed.

Finally, if there is a shareholder agreement regarding dissolution that complies with §450.1488 of the Michigan Business Corporation Act, then the Shareholders can dissolve the corporation.

The corporation is dissolved when the Certificate of Dissolution is filed with the Michigan Department of Consumer and Industry Services. However, the corporation’s existence is continued for the purpose of “winding up” the affairs of the corporation.

During the winding up period, the corporation may only:

1. Collect its assets.

2. Sell or otherwise transfer assets which are not to be distributed in kind to its shareholders.

3. Pay its debts and other liabilities.

4. And do all other acts incident to liquidation of the corporations business and affairs.

During the winding up process of a dissolved corporation, its officers, directors and shareholders continue to function in the same manner as if dissolution had not occurred and title to the corporation’s assets remains in the corporation’s name until they are transferred. Shares may be transferred and the corporation may sue and be sued in its corporate name. Dissolution does not abate actions brought against the corporation prior to dissolution.

Corporate dissolution does not change quorum or voting requirements for the board or shareholders, and does not alter provisions regarding election, appointment, resignation or removal of, or filling vacancies among, directors or officers, or provisions regarding amendment or repeal of bylaws or adoption of new bylaws.

[corporations.uslegal.com]

My questions is ... if Company B accepts monies for a brand assumed to still be part of Company A (while the company is in dissolution) would this be legal, and wouldn't these monies and any profits technically belong to Company A until the dissolution is final?

 

 

No, that would not be legal as stated above and the co-owners of A and B would be personally liable for wrongfully doing such.

 

 

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer.. I thank you in advance for taking the time to provide me a positive rating!

If you have any questions, about this or anything else, please ask for me, Law Pro, directly in the question and I will try to assist you as best I can.

For example, you would state, "This question is for Law Pro . . . (then on with your question).

Please keep in mind that, even though you have already paid your deposit money over to JustAnswer, until you rate me highly for my service, I will not be paid for having assisted you with your questions.

If you have additional questions, you may reply back to me using the Reply to Expert link and I will be happy to assist you further until your questions have been answered to your satisfaction.

I wish you the best in your future.

 



Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24427
Experience: 20 years experience in business law - sole proprietor, partnership, and corporations
Law Pro and 9 other Business Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
  • http://ww2.justanswer.com/uploads/DC/DCraneEsq/2012-8-14_14436_DCrane.64x64.jpg MShore Law's Avatar

    MShore Law

    Attorney

    Satisfied Customers:

    1233
    Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    1162
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    1142
    Run my own successful business/contract law practice.
  • http://ww2.justanswer.com/uploads/ohioatty/2009-1-22_185545_me.jpg J.Hazelbaker's Avatar

    J.Hazelbaker

    Attorney

    Satisfied Customers:

    393
    Experienced and trained in the area of business law.
  • http://ww2.justanswer.com/uploads/scottymacesq/2009-6-10_221523_small.jpg RGMacEsq's Avatar

    RGMacEsq

    Attorney

    Satisfied Customers:

    393
    Licensed Texas General Practice Attorney
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    301
    13 years practicing attorney, MBA
 
 
 

Related Business Law Questions