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 Richard - Bizlaw Your Own Question
Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10639
Experience:  30 years of corporate, litigation and international law
Type Your Business Law Question Here...
Richard - Bizlaw is online now
A new question is answered every 9 seconds

I am the only shareholder in 2 S-Corporations in Texas. 3 questions....

This answer was rated:

I am the only shareholder in 2 S-Corporations in Texas. 3 questions....

1. I want to add 2 people to the board of directors, do they have to be shareholders?

2. To do this I assume I just need to record an entry in our corporate minutes to show I elected them to the B.O.D.?

3. I want to also sell them some shares, but both are married and I want to protect the company from their spouse selling shares to say like a competitor, would a "first right of refusal" clause in our bylaws ensure that if they get divorced ensure that our company would be able to purchase the divorcee's half of the shares first so they can not be sold to just anyone?
The answers to your questions are as follows:

1. No.
2. Yes you should have either a shareholder meeting at which a resolution is adopted increasing the board to three people. You would also have a resolution electing the two people to serve as directors. In lieu of a meeting you can do a unanimous consent in writing by yourself, the sole shareholder.
3. You can sell the shares pursuant to an agreement that restricts them from selling to anyone other than the company without the approval of the company and subject to the same restriction. This would be contained in a shareholder agreement. I strongly suggest you have an attorney prepare the document and not try to do this yourself. You would as part of the agreement, require that the shares be legended so that when the shares are issued they carry the legend on their face showing that they are governed by the shareholder agreement and cannot be transferred except as set forth in that agreement.

If this answer is responsive to your question, please accept it. That is how we are compensated. I would also be appreciated if you provided feed back on your view of the answer. Finally, if the answer was especially helpful you can provide a bonus. If I can be of further assistance or you have other questions in the future you can ask for me and reach me at this site.

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.
Richard - Bizlaw and 2 other Business Law Specialists are ready to help you