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lwpat, Attorney
Category: Business Law
Satisfied Customers: 25387
Experience:  Attorney with over 35 years of business experience.
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There are two owners of an S corporation in NC. One owns 30%,

Customer Question

There are two owners of an S corporation in NC. One owns 30%, the other 70% of the company. The one owning 30% is not getting his voice heard and wants to get out and start another business that is basically the same with the changes that he wanted enacted. Is this legal or what has to happen to make this legal.
Submitted: 7 years ago.
Category: Business Law
Expert:  lwpat replied 7 years ago.
He cannot just leave and start his own competing business. Here he is going to either have to sell to the majority stockholder, probably at a loss, or try to force a dissolution of the company. That will cost a bunch in legal fees and could take 3 or 4 years to work through the courts. In other words he does not have a good option.
Customer: replied 7 years ago.
Thank you for your prompt response. Quick follow-up. If he sells his share of the company at a loss (and there is no non-compete agreement in place), how soon could he start a new similar competing company?
Expert:  lwpat replied 7 years ago.
If there is no non compete then he can start immediately but he would have to be careful not to directly solicit existing customers.

An accept for my time is always appreciated.