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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 117459
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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We have a corporation and i am the president with 50% ownership

Customer Question

We have a corporation and i am the president with 50% ownership of a pizzeria. My partner with 50% of the stock who lived out of the country, give her stock to her daughter. She presented herself and said she had to have a job in the pizzeria and has gone to the register and has pulled money without my consent or even a note of taken it. This situation has escalated and our corporation is broke. My landlord who knows the situation offered me to give me a new lease to another corporation made by me. Do I have a problem doing so?
Submitted: 5 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 5 years ago.
Yes, because you have to deal with the current corporation first and you have a fiduciary duty to that corporation. You are going to need a lawyer because the claim you have against the other shareholder is a claim of the corporation against her for breach of fiduciary duty and theft from the corporation and you must pursue her and sue her for damages and the money. Just because she is a shareholder does not give her rights to take money from the corporation and as such she has committed a theft and you can even pursue criminal charges against her with the DA.

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Customer: replied 5 years ago.
hI PAUL: iF I CONTINUE WITH THIS CORPORATION I'D NEED TO PUT A LOT OF MONEY FROM MY POCKET and get nothing from her. The things are in the point i have to deliver the keys to the landlord. He give the option of maintain the lease at the name of other corpration. What would be the porblem for me if i fo it?

Expert:  Law Educator, Esq. replied 5 years ago.
This would be considered breach of fiduciary duty to the current corporation and makes you just as guilty as the daughter who took the money from the register. You have legal grounds here, but you need to exercise them properly and that means filing a complaint of theft against the other shareholder and filing suit for breach of duty to the corporation and pursuing the other shareholder for damages. If you just close the current corporation it has to be properly wound up and if you engage in a new lease with the landlord under a new corporation at this point (not saying you could not do so eventually) it opens you up to countersuit from the other shareholder.
Law Educator, Esq. and 2 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
Hi Paul:
A law suit wouldn't bring any money to me, my partner has no money. We are almost with no money to play with. Really we are in the position of releasing the lease to the Landlord. My question is what I have to do with the Pizzeria's chattel . We have a note owing 70k. Can we give that chattel in lieu of the 2 months owed to landlord. Or what is the legal proceeding here.
Expert:  Law Educator, Esq. replied 5 years ago.
The problem is that without suing your partner still owns 50% of all of the property in the Pizzeria and can make a claim against you for that. But by you suing her you could get control over all of that to pay off the money she stole from the company. You cannot dispossess her of her rights in the company without a suit and if you form a new company you cannot take over the chattel without her having a right to 50%.
Law Educator, Esq. and 2 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
hi paul:
My question is if i only want to return the property to the landlord as the president, not trying to take control of it. What is the steps i need to do with the chattel. the problem is that the numbers are so tight that this is maybe a better option. sorry if i didn't explain myself. the other option you indicate me is very clear to me.

Expert:  Law Educator, Esq. replied 5 years ago.
You can return the property to the landlord as the corporate representative. You would need to enter a written agreement with the landlord describing the transfer of the property to the landlord and the terms of the transfer. Then you need to properly wind up the business, which would be by filing articles of dissolution with the state and for that you will need an attorney and you should consider using an attorney to draft the transfer agreement to the landlord as well.
Customer: replied 5 years ago.
could the chattel be given to the landlord in lieu of due rent payment?
Expert:  Law Educator, Esq. replied 5 years ago.
Yes, with a vote of the members. But it still will require a written agreement between and it is not merely as simple as you just giving it over to him.