Skip to main content

Can I be removed as a Director?

Ontario, CA |

I am a 1/3 shareholder of a California corporation and the other 2 shareholders have already made it so that only 66 1/3 vote is necessary and have removed me as the Secretary. I believe they are going to try to remove me as a Director and then attempt to go after my shares. I don't have money or legal council to protect myself. There is no shareholder agreement in place. What reasons can they try to use to remove me as a Director? Is this possible/ Is there anything I can do?

Attorney Answers 5

Posted

One would have to view your bylaws, but normally one third ownership of shares guarantees you a seat on a three member board of directors.

As I just mentioned in my answer to your other posting, you need to be finding a business litigator. Avvo has many to choose from in the Find a Lawyer function below.

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.

Mark as helpful

7 lawyers agree

Posted

It seems like there may be some underlying problems here. Depending on the specific facts and cirucmstances of your situation there may be other issues that play a part such as each shareholder's obligation to the others. While it may difficult financially, you should speak with an attorney who can flesh out the facts and issues of what's going on.

THIS IS NOT LEGAL ADVICE. INFORMATIONAL PURPOSES ONLY. Legal matters are like thumbprints, no two are identical. Therefore, you should discuss your question with your own attorney or if you do not have an attorney, strongly consider hiring one. The information in this posting is for general information purposes only. No part of this posting should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Mark as helpful

6 lawyers agree

Posted

I agree with my colleague. It is not possible to answer this question effectively nor accurately without a review of the corporate bylaws.

Mark as helpful

5 lawyers agree

Posted

I agree with my colleagues and will add the following:

Your likely trump card with respect to maintaining your board seat (and giving the other shareholders something to think about) is cumulative voting. Please see the post at the link below.

This information does not constitute legal advice and does not establish an attorney-client relationship.

Mark as helpful

5 lawyers agree

Posted

In order to remove you as a shareholder they would have to buy your shares. That may be of benefit to you if they are not communicating with you. In any event, you should look at the bylaws. They might require more than a 2/3 vote to remove a director.They might also require that there are a minimum of 3 directors in which case they would be in violation of the bylaws. If you don't have a copy of them, you have a right to access all records of the company under state law. You should formally request to see them via a certified letter. Keep records of all of your communications with them. Best of luck to you.

Our replies to Avvo questions should not be considered specific legal advice to any individual, and no attorney-client relationship is formed with you. Our aim is to provide general principles that may be useful to the Avvo community as a whole. You should seek individual legal advice pertaining to your specific factual situation, and the laws applicable to your jurisdiction.

Mark as helpful

3 lawyers agree