Can I give myself a severance package?

Asked over 1 year ago - Grand Rapids, MI

I am the president of a small incorporated business with one other shareholder. We have agreed that it is time to dissolve the corporation. Can we give ourselves severance packages?

Additional information

Incorporation is in the state of Michigan.

Attorney answers (4)

  1. Matthew Scott Berkus

    Contributor Level 20

    5

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    Best Answer
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    Answered . Depends, does the corporation have creditors?

  2. James P. Frederick

    Contributor Level 20

    3

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    Answered . I agree with Mr. Berkus. The tax consequences are probably going to be the tricky part, so running this by a CPA is a very good idea.

    James Frederick

    ***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ******... more
  3. Reese Serra

    Contributor Level 13

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    Answered . This is a complex question. The answer is yes you can, but depending on a variety of factors, there may be consequences. Please contact my office for more info and a consultation. - Reese Serra

    This advise is only being offered as a courtesy. We do not have an attorney-client relationship and I do not... more
  4. Ricardo O'Neil Bernard

    Contributor Level 6

    2

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    Answered . Beyond this you may also want to consider what your fiduciary duty to the company is. As president you may owe a fiduciary duty to the company, e.g., acting in the best interests of the company. If the potential severance package is seen as excessive or unwarranted you may be in breach of that duty. As always with these issues, seek advice from an attorney and present the full facts of the case along with the company's organizational documents so you can get an answer based on all the facts of your case.

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