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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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what is the requirments for produccing documents to its shareholders

Resolved Question:

what is the requirments for produccing documents to its shareholders when they are demanding them. What about costs and preparation and time. How much time and do we have to deliver.
Submitted: 7 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 7 years ago.
Thank you for your question.

What exactly are the shareholders demanding?
Customer: replied 7 years ago.
This one shareholder has 10%. He is asking for additional 10% because he claims that he did somethings for the s corp. You need to know that an s corp is set up like a corp limited liability, but it treats the shareholders as partners. they can contribute more and can recieve more shares or capital persentage. At the moment, this single shareholder has an attorney that is asking for documents. articles of corp, minutes of the meetings,profit and loss statements (provided yearly to each shareholder)and an account of the other shareholders contributions to pay its bills. This s corp does not have income. so the shareholders have been paying its bills reguired to keep the minining claims.
Expert:  Dimitry K., Esq. replied 7 years ago.
Thank you for your follow-up.

I am quite familiar with the S Corp business model--I set them up for my clients, and even my own firm is set up as an S Corp.

In terms of what the attorney is requesting, most of that is reasonable. All shareholders are permitted to see the minutes and the P & L reports upon request. The contributions of other shareholders, if their contribution did not increase their ownership stake in the company, does not have to be shown as it is deemed irrelevant. However the costs for creating the documents if they weren't created before can be at least partially transferred to the other shareholder--copy costs, for example, can be borne by the requesting party. Creation of a report you were already supposed to possess remains the responsibility of the S Corp.

Edited by Dimitry Alexander Kaplun on 8/2/2010 at 6:18 AM EST
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