This is for a S-Corp in California with no shareholder agreement in place.
My business partner (he is president and 50% shareholder, I am secretary and 50% shareholder) has taken over the business and more or less fired me because of philosophical differences on how to grow the company.
To date The business owes me $4,800 I have put in since I bought shares to keep the business afloat (compared to his $500-$1000). I have never received any salary or sales commission to his $6,500 in distributions to himself. I have literally never worked harder at anything in my life - I have sacrificed so much.
He now wants me to sell him his shares back, but he does not have an offer that reflects the time, effort, and risk that I have put in.
He is holding all the company property (which is half mine) as bartering chips to get all my shares. Currently he has agreed to pay $3,200 for my expenses and he will sign over the title
of our first truck to my mom (who lent $6,000 and has not received a penny from the business). It is already half my truck anyway, but I feel like cooperating and surrendering is the only way to get some money from this snake.
To be fair, his main problem is that he has twice as many sales as me. It is true, it is my contention that I have done most/nearly all of the startup work to get us to this point. He feels he has done just as much non-sales work as me. I feel like I could prove him wrong, if I had to.
By the way, his main threat is that if I don't hand over the shares, he will dissolve the company, take all of "his" customers, and start a new business. It is his assertion that I would lose everything in this scenario, because I took a risk when I was bankrolling the company.
Should I cooperate and hand him my shares and destroy about 6 months of work, my capital, and my dreams?
Basically I want to sign the shares so I can get my mom's truck back, $3,200 dollars now (I paid his rent 2 weeks ago for $2500).
Once I sign my shares over, is that it? Do I have any legal recourse that he was acting as an unelected dictator and using company property as bargaining chips??
I also want to add that my rough valuation on the company after debt is $40,000. Making my shares worth $20,000. I would love to offer him $20,000 for his shares but I don't have it, and I do not think he would take it.