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I have a client who has a Delaware Holding Company that was

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set up. There were...
I have a client who has a Delaware Holding Company that was set up. There were 2 people on the organizing document that were to be officers\directors until the first annual meeting. There was no such meeting, nor was any stock issued, or bank account set up. They filed their first tax returns as such. There is no documented information as to allocation of ownership. The company is about to start doing business, they have secured funding, etc. During this process, one of the "owners" dies. How is the ownership divided absence a will?
JA: Has anything been filed or reported?
Customer: just the registration\incorporation papers, and the Delaware Annual Report, which said no stock had been issued.
JA: Anything else you want the lawyer to know before I connect you?
Customer: Oh, it is a C corporation
Submitted: 1 year ago.Category: Legal
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Customer reply replied 1 year ago
I want a Delaware Attorney to answer this question.
Answered in 28 minutes by:
10/24/2016
Lawyer: Law Educator, Esq., Attorney replied 1 year ago
Law Educator, Esq.
Category: Legal
Satisfied Customers: 121,082
Experience: JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Under the DE corporations code, if a board member who is an owner dies, absent any provision in the bylaws of the corporation the board position is filled by vote of board of directors in accordance with Section 142 of the DE Corporations Code Section e. See: http://delcode.delaware.gov/title8/c001/sc04/
As far as ownership of the shares, absent a bylaw to the contrary, without a will the heirs at law of the deceased member take ownership of the shares left by the deceased and have the rights of proceeds of those shares.
Section 223 of the code states that if there are no directors on the board, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the certificate of incorporation or the bylaws, or may apply to the Court of Chancery for a order regarding elections.
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