Can a family run corporation fire a member of a corporation

Asked almost 2 years ago - 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)

  1. Michael Charles Doland

    Contributor Level 20

    11

    Lawyers agree

    Answered . 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... more
  2. Andrew Richard Edward Gale

    Pro

    Contributor Level 9

    10

    Lawyers agree

    Answered . 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... more
  3. Robert V Cornish Jr.

    Contributor Level 16

    10

    Lawyers agree

    Answered . 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... more
  4. Mahyar Ghassemian

    Contributor Level 7

    3

    Lawyers agree

    Answered . 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... more

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