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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118087
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Can one (1) out of (3) Owners of S Corporation in NJ be removed

Customer Question

Can one (1) out of (3) Owners of S Corporation in NJ be removed from the Corporation without prior consent?
Submitted: 4 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 4 years ago.
An owner of a corporation cannot be moved out except in accordance with the bylaws of the corporation. If the bylaws do not provide for removal, then the NJ statute provides the board may remove a director (not as a shareholder without buying them out).

NJ Statute 14A:6-6. Removal of directors
(1) One or more or all the directors of a corporation may be removed for cause or, unless otherwise provided in the certificate of incorporation, without cause by the shareholders by the affirmative vote of the majority of the votes cast by the holders of shares entitled to vote for the election of directors.

(2) Unless otherwise provided in the certificate of incorporation, the removal of directors, with or without cause, by vote of the shareholders as provided in subsection 14A:6-6(1), is subject to the following qualifications...


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Customer: replied 4 years ago.

Paul,


 


Thank you so much for clearing up the confusion that I had going on. Your response was quick and very informative.


 


Rose Marie

Expert:  Law Educator, Esq. replied 4 years ago.
Thank you. Please do not forget to click on excellent service feedback as that is the only way we get credit for assisting you.