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Law Pro
Law Pro, Attorney
Category: Legal
Satisfied Customers: 24870
Experience:  20 years legal practitioner: real estate, collections, estate, civil, business, and criminal law
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My husband is a 50 percent owner in an S corporation and his

Customer Question

My husband is a 50 percent owner in an S corporation and his father owns the other 50 percent. His father has not actually "worked" in the company for about 8 years now, but continues to take an equal salary, bonuses, etc. from the company. The company is now to the point of expansion but my husband is unable to hire the appropriate employees to support this growth because of the amount of money being paid to his father, who is not productive in the company. My husband has tried to buy his father out but he refuses. Is there any legal way to force a non-productive partner out of a company?
Submitted: 8 years ago.
Category: Legal
Expert:  Law Pro replied 8 years ago.

First, your going to have to look or review the operating agreement for the corporation. Is there any type of operating agreement or (old) partnership agreement as to how monies are to be paid betwee the two?

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Customer: replied 8 years ago.
Expert:  Law Pro replied 8 years ago.

Okay. That's done. There's 2 ways to proceed:


1) Buy the father out at an agreed price.


2) Have your husband take a salary and deny the father from taking a salary because he's not doing any work. This is a tough situation and will certainly leave hard feelings.


Did the father start the business originally?