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?
Incorporation is in the state of Michigan.
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.
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3 lawyers agree
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 represent you. Additional, the advice I have provided was based on the limited fact pattern provided by you. If the facts differ, my advice may not be correct. If you live in Michigan and would like legal assistance with your issue, feel free to contact me: 586-615-0756 / Reese8484@aol.com (ADVERTISING MATERIAL)
Venture Capital Attorney
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.