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My partner who owns 51% has opened a corporate bank account where i as a 49% owner have no access.

Woodland Hills, CA |

Also, i went to the bank and had them put a freeze on the account yet my partner still wont add me nor release any money to me. What rights or power do i have to get access to the money i am owed for work we have done.

Attorney Answers 4

Posted

Without knowing more about your corporation and business, whether you are an officer or director, and what compensation arrangements might be in place for the work you have done, it is not possible to answer this question.

I strongly suggest you meet with a lawyer experienced in inter-shareholder disputes to discuss this matter. There obviously is an enormous amount of distrust between you and your co-shareholder right now. My experience in this area teaches me that a prolonged dispute between shareholders in a close corporation like this presents a serious risk of destroying the business.

There are a number of us on AVVO with experience in this area. I strongly suggest you contact one of us at your earliest opportunity to discuss this matter.

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Asker

Posted

I co own a C corp in california. I am the treasurer in this case and he is the president. He has opened a corporat account at a bank where he has frozen me from access and he will not put me on the account where money from our customers has been going to without my knowledge since mid march. I had the bank put a freeze ont he whole account until we fix this matter, yet my partner refuses to add me and doesnt care what i say at this point.

Charles Richard Perry

Charles Richard Perry

Posted

Your comment clarifies the situation, but does not change my ultimate advice. You need to speak to a lawyer about this with experience in inter-shareholder disputes, and figure this out.

Posted

I agree with Mr. Perry's answer. Unfortunately, unless your "partner" is cooperative, you may have to resort to the court to exercise and enforce your legal rights. Those rights will depend on many things, none of which are mentioned in your question. Your question indicates that things between you are about as bad as they can get. You need to consult and retain counsel to protect your interests as a minority shareholder.

I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for general information only. They are not legal advice or counsel. Answers must not be relied upon. Legal advice and counsel must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. I provide legal advice and counsel during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website are not privileged or confidential and I assume no duty to anyone by my participation on Avvo or because I have answered or commented on a question. All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice or counsel in answer to any question, if you are an interested party you should promptly and personally consult with an attorney for advice and counsel. Also, see Avvo's terms and conditions of use, specifically item 9, incorporated by this reference

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Posted

Yes, it is true that you did not include enough information to answer this question, but there are some facts that can be deduced from the information you did provide and some law which probably applies to your facts. As a minority shareholder, you are owed a fiduciary (the highest possible) duty by the majority shareholder. He controls the company by virtue of his majority interest, but he cannot act in a manner which is designed to damage your interests. Your claim for compensation for work performed requires more information. Are you supposed to be paid hourly, salary, by the job or are you supposed to share in the profits of the company with no direct compensation for your work? As indicated by the other attorneys, get a lawyer to review your rights.

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Asker

Posted

To update everyone who has been so helpful, Here is what transpired yesterday. At the bank, the vp of the bank went through the account as I had it frozen the previous day. My partner had forged our statement of information filing with the state and that is how he was abke to open it. What makes wonder if the bank has any liabity Is he actually made a copy of a blank filing form and filled it out in front of them. They did not check or verify any info and just opened it. We allwent online to prove that I am an owner thus was then given access and placed my name on the account. Is my partner also criminally liable for providing false information in an attempt to hide or embezzle money?

Posted

I respectfully disagree about the fiduciary duties between shareholders in California. It is a very limited fiduciary duty. Fiduciary duty between directors is far more extensive.

You may need a litigator to sort this out. After a complaint is filed, I personally would suggest mediation in an effort to find a win-win instead of litigation which is inherently win-lose. If there is no progress in mediation, at least you have started the ball rolling towards a trial date.

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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