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Can a family run corporation fire a member of a corporation

Mount Shasta, CA |

This is a family run corporation from which the other family members/corporate members are trying to fire a corporate member from his job with no terms for firing. They have in affect fired him effective yesterday and given then 28 days to move off the corporations property. Is this legal?

Attorney Answers 4

Posted

A lawyer would want to see the bylaws and any other contract relating to the subject. As a general rule, if no facts, a corporation my fire any employee without a conract or without an equity interest in the corporation. Further, Directors can fire officers and Shareholders can recall or not re-elect Directors according to the rules in the bylaws.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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Asker

Posted

He is a 23 percent share holder with more shares in trust for more information for you and for us you may call please!

Michael Charles Doland

Michael Charles Doland

Posted

He may well have rights. A lawyer in LA will not be good enough. You need someone local to you in Mt. Shasta. I am sure you will finda good business litigator. Good luck.

Posted

One would surmise this family member does not have an employment contract with the corporation? Are there any corporate minutes that appointed this person with exceptions to certain parts of the by-laws? If there's a contract in place termination may not be at wioll

In short, you need to review any employment contracts and your corporate records, including records of meetings, etc.

Family Office Exchange is an excellent resource for guidance and other resources to family run businesses of signficant means, with their website at www.familyoffice.com.

The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.

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Posted

There is NO contract or terms set in corporate minutes. There is howerever 10 thousand acres of land that the sisters want to get there hands on he has 196 shares and more in trust. They copied a document offline no attorney behind it firing him immediately and giving them 28 days to get off the ranch in the meantime they have moved motor homes in and surrounded their home they have lived in for 20 plus years and have men sitting around in chairs watching them in their home.

Posted

I agree with the comments of Mr. Doland and Mr. Cornish.

It can come as quite a shock to the person who was terminated, but there is no prohibition in a "family-run" corporation setting for board of directors to terminate a family member employee from their job. As a general principle, there is no legal requirement to provide for the “terms” of the firing. There is also no legal requirement to provide 28 days to move personal effects from the business. All of the employees of the corporation work at the pleasure of the officers of the company. The officers of the company work at the pleasure of the board of directors. The board of directors ultimately report to the shareholders of the corporation. All decisions are made in this top-down funnel of authority.

There would be two places to look for exceptions to this general rule. First, one would look to a written employment agreement and the provision(s) that pertain to termination. The second place to look would be the corporate records, including corporate bylaws and corporate minutes, which address the issue of employee termination. I hope these thoughts were helpful.

IncorporationAttorney.com -- LEGAL DISCLAIMER: This answer is offered for informational purposes only. It does not constitute an attorney-client relationship.

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Posted

As my colleagues suggested, there are a lot of variables in this type of a situation. A number of documents could control the relationship of the parties in the case of a corporation. Some examples could be the bylaws; co-founders’ agreement; an employment agreement or any other contractually binding piece of writing even if informally written. Have an attorney examine the facts so you get the best and most comprehensive advice for your facts.

The above information is educational in nature and is provided as a guideline. It is not given as specific legal advice. Each case is different and you should consult with a licensed attorney for your specific case.

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Michael Charles Doland

Michael Charles Doland

Posted

Most respectfully, if you "agree" more or less with another lawyers answer and press "I agree" you receive 2 points and the other attorney 5. With 30,000 points from Avvo level 19 to level 20 I am sure you understand the advantage.

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