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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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I am a director in a software company, I also own 25% of the

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I am a director in a software company, I also own 25% of the shares. There are 3 other shareholders with 25% each ownership. One of the shareholders has the administrative rights to the company domain name and will not let the software engineer in charge have administrative rights for an upgrade to our servers. He also has the same rights to our email. In effect, he could shut down our internet company and our email if he wanted. There are 3 directors and he is one of the directors. The board(which he is one of 3 directors) asked if he would release administrative rights to at least one other director and he has refused...what can we do?
Submitted: 7 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 7 years ago.
Thank you very much for your question. This is a question that can be resolved by your operating agreement which should provide the directors with the right to compel the hold-out to provide services as requested. Or, as shareholders, you can vote the shares to compel the hold-out to provide the administrative rights to the name solely for upgrade purposes.

Since this appears to be an issue that goes to the heart of the business, and can subsequently cause harm to the company, you as shareholders also have the ability to file a breach of fiduciary duty suit, but only once your injury to the business occurs.

I realize that you are hoping for an easy answer here--your best bet is to review the agreements as it stands to see the voting privileges that you maintain. Otherwise, you might only be able to get rights via court order. I am sorry.

Dimitry Alexander Kaplun, Esq.

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