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Founders' Rights

What is a founder?

A founder is a person who creates, or originates the idea or concept for a company. It can also mean an individual who has the company, organization, and/or state in his/her name. Read below to find more information and answers given by the thousands of available experts strictly regarding founders rights.

Can the Founder of a non-profit take control of the business again when the Board not acting in a manner that is beneficial to the company?

There should be by-laws or operating rules that are set in place for the non-profit that would spell out what responsibility that the Board of Directors has and what the procedure is for any situation that may arise. If the non-profit does not have a set of by-laws or rules, then the Board of Directors can have a vote to adopt a set of by-laws or rules. In many cases there are some “boiler plate” by-laws that the Board may use or adapt to specific non-profit companies. These types of non-profit companies are registered with the state and have to follow a strict set of rules to remain tax exempt. One person in the non-profit cannot do what they want and when.

In the state of California, can a founder or co-founder of a private corporation sell some of their private common stock?

In most cases the common stock of a closely held privet company can be sold as long as the sale is equal to or above the regular value if a regular value is declared on the shares. While in most cases it is desirable to report the share sale to potential investors, it is not necessary unless the dilution or voting control would change due to the result of the sale.

In the state of Michigan, can a founder of a not for profit organization dissolve the organization without the consent of the board of directors?

In most cases, dissolution can happen by a vote of the Board of Directors or shareholders or by obtaining a court order. It is very rare for the company’s operating documents to grant such powers to the founder of the company.

How can shareholders remove the chairman/founder of a Limited Liability Company (LLC) for incompetence?

In most cases the shareholders elect and remove any member of the Board of directors. Any member of the Board of Directors can be removed by the shareholders at a duly authorized shareholder meeting and at this time a notice of the meeting would be sent out and then a vote would be placed to remove the chairman/founder.

Whether a person is the founder of a company or is thinking of becoming a founder of a company, they still have rules and laws that they must abide by. Whether or not they have already or is planning to found a company, the questions and issues may need to be addressed so that the company can run efficiently and effectively within the scope of the laws. Addressing these questions and concerns with an Expert will help the founder, potential founder or co-founder start or continue to run a company in the best way that he/she can while understanding their founder rights.
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