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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 111671
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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I Cofounder a company and worked 4 years building

Customer Question

I Cofounder a company and worked for free 4 years building the company then pushed out by new ceo after B round. I have a 6% equity position, observ board seat but now removed from the website and not getting credited as cofounding the company. Its hurting my ability to get deals done and reputation. What are my options?
Submitted: 6 months ago.
Category: Legal
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Your rights and options are based on whatever the shareholder/membership agreement state they are. If there is no shareholder/membership agreement, your options as a 6% equity member are pretty limited. If they are not crediting you with cofounding the company, you would have to go through the board to resolve that matter, since there is no actual law that says anyone has to receive credit for founding a company (so you could not sue under any law for that).
As far as pushing you out, you would have to refer to the operating agreement or bylaws to see what those say about your rights to retain your position with the company and whether or not they removed you properly. Without anything in an operating agreement or bylaws, the default legal rule is that any member may be removed from working for the company or may be removed from the board with a vote of the board.