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TexLaw
TexLaw, Attorney
Category: Business Law
Satisfied Customers: 4430
Experience:  Internationational Commercial Attorney
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can i sue someone as a business partner for closing the business

Customer Question

can i sue someone as a business partner for closing the business even if I am only 40% shareholder?
Submitted: 4 years ago.
Category: Business Law
Expert:  TexLaw replied 4 years ago.
Thank you for your question.

Do you know if the business is incorporated?

If so, what kind of incorporation is it? An Inc., an LLC, etc?

Customer: replied 4 years ago.

hi,


yes it is Incorporated as a corporation inc.


thanks


 


 

Expert:  TexLaw replied 4 years ago.
Unless there is some sort of written agreement between you and the other shareholders which controls when the business may be shut down, the business is controlled by the Florida Business Corporations Act, Fla. Stat. § 607.0101 (2012) et seq.

Thus, only a majority vote is required to dissolve a company:

§ 607.1402. Dissolution by board of directors and shareholders; dissolution by written consent of shareholders


(1) A corporation's board of directors may propose dissolution for submission to the shareholders.

(2) For a proposal to dissolve to be adopted:

(a) The board of directors must recommend dissolution to the shareholders, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders; and

(b) The shareholders entitled to vote must approve the proposal to dissolve as provided in subsection (5).

(3) The board of directors may condition its submission of the proposal for dissolution on any basis.

(4) The corporation shall notify each shareholder of record, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with s. 607.0705. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

(5) Unless the articles of incorporation or the board of directors (acting pursuant to subsection (3)) require a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by a majority of all the votes entitled to be cast on that proposal.

(6) Alternatively, without action of the board of directors, action to dissolve a corporation may be taken by the written consent of the shareholders pursuant to s. 607.0704.


So, unless the Articles of Incorporation require that your shares also are needed to approve the dissolution of a company, the company can be dissolved by a majority vote. Assuming that the other 60% shareholders approved, this would be legal and would not be something you could sue for.

Please let me know if you have further questions.

-ZDN
Customer: replied 4 years ago.

Hello,


Does being a VP constitute being on the board of directors? I was notified by email thru his lawyer that he wished to disolve? does this constitute a legal form of disolving if I didn't respond by the date on the email?


Thank you


 

Expert:  TexLaw replied 4 years ago.
Thanks for your response.

There should have been a shareholder vote on the issue. If there wasn't then this would have been an improper dissolution.

A VP is an officer of the company, not a director (however, a person who is a VP can also be a director).

Have you been given any compensation for the dissolution?

Expert:  TexLaw replied 4 years ago.
Hi,

I'm just following up with you on this question. I see that you have not accepted my answer by scoring my service positively. Again, I don't get paid by the website for the work I've done unless you do this. I'd really appreciate it if you'd take few seconds and score my work positively.

Thanks,
ZDN