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can a V.P-wife of 49% business Co owner give her secretary-spouse

half of her shares without...
can a V.P-wife of 49% business Co owner give her secretary-spouse half of her shares without consent of the President of company? Nepotism?
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Answered in 2 minutes by:
1/5/2012
Richard - Bizlaw
Category: Business Law
Satisfied Customers: 10,687
Experience: 30 years of corporate, litigation and international law
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bizlaw :

Unless there is a specific agreement preventing a transfer of shares, a person is free to do with stock they own as they see fit. She would not need anyone's consent to make such a transfer.


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.

Customer:

Would they be entitled to any ownership of the company if this happens?

bizlaw :

They can transfer shares they own as they please. However, that does not give them the right to issue new shares from the company. The transfer of shares between spouses does not alter the total number of shares they own together so really does not impact the total ownership interest in the company. If you own 51% and the two of them each own 24 and 25% if they change their ownership between themselves they still own just 49% together.


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.

Customer:

I as 51% owner am very uncomfortable with this. Would this give the secretary-spouse then any say in the company?

bizlaw :

The company is controlled by the board and the board is elected by the majority of the shareholder, i.e. you. Whether the spouse secretary has shares does not give him any more say in the business because he is a minority shareholder. Who are the directors of the company?

Customer:

Thank God!!! Me, Her and him sec

bizlaw :

If he is on the board, then whether he has shares or not does not make any difference. Do you have a shareholder agreement that determines who is on the Board?

Customer:

yes

bizlaw :

Does the shareholder agreement say the three of you are on the board?

Customer:

yes

bizlaw :

Then whether the spouse owns shares he gets no more power or voice in the company than was the case before the shares were transferred. A majority of the board of directors makes the big policy decisions governing the company. The President as chief executive officer is in charge of all day to day operations. The shareholders get to elect directors and vote on major issues affecting the company such as selling the company.


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.

Customer:

You're AWESOME!!! We NEED people like you. Thank you very much!!! God Bless

Richard - Bizlaw
Category: Business Law
Satisfied Customers: 10,687
Experience: 30 years of corporate, litigation and international law
Verified
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