Business Law

Ask a Business Lawyer. Get Business Law Questions Answered ASAP.

Ask a Lawyer,
Get an Answer ASAP!

Business Law
This answer was rated:

In a small S-Corp with very few shareholders, can the slim

majority vote to remove a...
In a small S-Corp with very few shareholders, can the slim majority vote to remove a board member with no cause for removal other than vindictive reasons? What actions on the board member in question can be done to fight back?
Show More
Show Less
Ask Your Own Business Law Question
Answered in 31 minutes by:
4/3/2013
J. Warren
J. Warren, Attorney
Category: Business Law
Satisfied Customers: 2,249
Experience: Experience in general business transaction and formation matters.
Verified

Hello and Welcome! Thank you for allowing me to be of service to you. Please note: (1) this is general information only, not legal advice; and (2) I will provide you with honest information and not necessarily to tell you might be hoping to hear.

I am very sorry that you are dealing with this situation. Section 53-11-39 Removal of directors states that unless otherwise stating in the bylaws or articles of organization if a meeting is called expressly for the purpose of removing a director, he/she may be removed with or without cause by a majority of shareholders entitled to vote.

Here is a link to the statute: www.nmprc.state.nm.us/corporations/statutes/article11/39.html

The exception to removal with or without cause is if the Articles of Incorporation provides for 2 or 3 classes of directors to be elected and each class is to serve 1 term of office and then the next class steps in for the second term. If this is the case, removal must be for cause.

I am sorry the shareholder's have voted out a director for vindictive reasons. Unless the Articles of Incorporation or bylaws state removal of a director may only be for cause, a director does not have a claim of action against the shareholders for removal if a majority voted for such removal.

I apologize that this was probably not the answer you were hoping to receive. However, it would be unfair to you and unprofessional of me were I to provide you with anything less than truthful and honest information.

All my best & encouragement.

Please note that you are asked to rate my courtesy and professionalism, and not whether the answer supports your legal position. I only receive credit when rated 3 or higher. If for any reason you feel that a low rating is appropriate, please first give me the opportunity to address your concerns by clicking the "reply" tab. This communication does not establish an attorney-client relationship with you.

 

J. Warren
J. Warren, Attorney
Category: Business Law
Satisfied Customers: 2,249
Experience: Experience in general business transaction and formation matters.
Verified
J. Warren and 87 other Business Law Specialists are ready to help you
Ask your own question now
Ask J. Warren Your Own Question
J. Warren
J. Warren
J. Warren, Attorney
Category: Business Law
Satisfied Customers: 2,249
2,249 Satisfied Customers
Experience: Experience in general business transaction and formation matters.

J. Warren is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Attorney

1,793 satisfied customers

Experienced lawyer

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

1,611 satisfied customers

Run my own successful business/contract law practice.

MShore Law

MShore Law

Attorney

1,233 satisfied customers

Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements

RGMacEsq

RGMacEsq

Attorney

742 satisfied customers

Licensed Texas General Practice Attorney

Barrister

Barrister

Attorney

640 satisfied customers

17 years practicing attorney, JD, BA, MBA

Ely

Ely

Attorney

564 satisfied customers

Counselor at Law.

J.Hazelbaker

J.Hazelbaker

Attorney

393 satisfied customers

Experienced and trained in the area of business law.

< Previous | Next >

Related Business Law Questions
Can you close an 1120S corporation and still have the
Can you close an 1120S corporation and still have the benefits of a 1033 exchange pass through to the shareholders? … read more
WiseOwl58
WiseOwl58
JD Honors Graduate
3,497 satisfied customers
Mostly, do I have the right as a shareholder to request a
Mostly, do I have the right as a shareholder to request a copy of the bylaws? No one says I don't but I want to make sure I do before I ask.I am part of a small family business. The president, who is … read more
mclemorelawyer
mclemorelawyer
Doctoral Degree
4 satisfied customers
Do all shareholders, ( 3 shareholder corporation) have the
Do all shareholders, ( 3 shareholder corporation) have the right to inspect the bank accounts? (florida corporation) … read more
Dwayne B.
Dwayne B.
Juris Doctor
28,498 satisfied customers
According to new law can only 50% shareholder and directors
According to new law can only 50% shareholder and directors apply for dissolution of the company without the knowledge of the other 50%?… read more
Ray
Ray
Lawyer
Doctoral Degree
30,219 satisfied customers
Texas. I am a shareholder and a note holder in a private
Texas. I am a shareholder and a note holder in a private company in Houston. I have given a partner my proxy of shares and he serves as my trustee with fiduciary responsibility. I just found out that … read more
socrateaser
socrateaser
1,031 satisfied customers
My family and i have a corporation it is a s corporation we
my family and i have a corporation it is a s corporation we had a family issue in which there was a 50 50 split one member from the other side sold her shares to the other side breaking the time so th… read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
I am resigning as an officer, shareholder, and part time day
Hi, I am resigning as an officer, shareholder, and part time day manger from a 3 person s-corp running a restaurant/bar. Can I mange this process on my own? If I send via certified mail a formal lette… read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
886 satisfied customers
IS A "C" CORPORATION REQUIRED TO HAVE AN OPERATING AGREEMENT
IS A "C" CORPORATION REQUIRED TO HAVE AN OPERATING AGREEMENT WITH ITS SHAREHOLDERS OR OFFICERS?… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
Is shareholder approval required to move a corporation out
Is shareholder approval required to move a corporation out of Nevada? We did a conversion to Colorado before our new annual list of officers and directors and business license was due. I think that is… read more
Ray
Ray
Lawyer
Doctoral Degree
30,219 satisfied customers
Here is proposed "Purpose" bylaw language for an Illinois
Here is proposed "Purpose" bylaw language for an Illinois Not for Profit/501(c)(7):Section 1. The purpose of this corporation is to operate as a private club for the social and recreational benefit of… read more
LawGuy
LawGuy
Juris Doctor
123 satisfied customers
In Colorado if an s corporation has no bylaws and there is a
In Colorado if an s corporation has no bylaws and there is a situation of possible left using a debit card by an employee and 20% shareholder does the State of Colorado use default bylaw and where can… read more
socrateaser
socrateaser
1,031 satisfied customers
We (Dasdemirs) run an s-corp as majority shareholders & are
We (Dasdemirs) run an s-corp as majority shareholders & are having difficulties with partners (Goboks). We have been homeless while running the shop to meet liabilities. The Goboks want their money ba… read more
Damien Bosco
Damien Bosco
2,991 satisfied customers
Can a corporate board require shareholder participation in,
can a corporate board require shareholder participation in, and personal guaranty of, future corporate loans against the wishes of the individual shareholder… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
Amendments. Bylaws of this corporation may be adopted,
Amendments. Bylaws of this corporation may be adopted, amended or repealed by the vote or written consent of either (i) the board of directors or (ii) the shareholders entitled to exercise a majority … read more
J. Warren
J. Warren
Attorney
2,249 satisfied customers
My dad was a 51 shareholder in a new California corporation,
My dad was a 51 shareholder in a new California corporation, he used a buyout form to purchase for a 1 dollar the other 49 percent because the other shareholder had a difference of opinion on how the … read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,683 satisfied customers
In case of a corporation, if between two shareholders, one
in case of a corporation, if between two shareholders, one shareholder just abandon its shares and disappears, can another shareholder be considered as 100% shareholder?… read more
socrateaser
socrateaser
1,031 satisfied customers
A family California corporation with three shareholders is
A family California corporation with three shareholders is having difficulty. It is believed that the shareholder that is acting as President currently is misappropriating funds (paying for personal e… read more
socrateaser
socrateaser
1,031 satisfied customers
If an 80% shareholder elects to dissolve a corporation and
If an 80% shareholder elects to dissolve a corporation and such dissolution would provide that the 80% shareholder would get 80% of net profit until business wound up, is that a conflict requiring tha… read more
Asad Rahman
Asad Rahman
Attorney
J.D.
2,196 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x