I, along with two other shareholders, own 38% of the shares of a local company. The majority owner (61%) and President of the company will not return our phone calls/emails and has cut off all communication with us. We have not seen any financial statements for a few years and we have not received K-1s. What can we do to protect our interests and receive our rightful share of profits?
Personal Injury Lawyer
See a local attorney about filing a shareholder suit.
IF YOU FOUND THIS ANSWER HELPFUL PLEASE CAN THANK ATTORNEY MEMMEN BY MARKING IT “BEST ANSWER” or “HELPFUL.” Mr Memmen is donating his time and talent by answering questions to help those in need of legal information. THIS IS NOT A CONSULTATION and in no way creates an attorney-client relationship. Alexander Memmen recommends that you always consult – in person – with a local attorney before taking any action.
Divorce / Separation Lawyer
You are going to want to speak with a corporate attorney. Majority shareholders are not allowed to "oppress" minority shareholders in a closely held corporation. You also have broad rights to information as a shareholder. Failing to give you a K-1 is potentially quite serious because of the IRS implications, and the president could be held personally liable for any penalties and taxes you incur. You also will want to ensure that the President has been running the company properly and filing and paying taxes, especially payroll taxes, since the shareholders can be held personally liable for unpaid withholdings (IRS 941's). You might contact Robert Murillo on Avvo.com - he does a lot of business law. I hope this helps.
You can reach Dave Rich at (303) 886-2516 or email@example.com. Dave Rich is an attorney licensed in Colorado. Answering your questions does not create an attorney-client relationship between us. You should speak with an attorney to whom you have provided all the facts in your case, before you take steps that may impact your legal rights. I am not obligated to answer subsequent emails or phone calls unless you have hired me. I wish you the best of luck with your situation.
You need to speak with a business attorney. There are lots of moving parts at issue and the attorney would want to review the articles, bylaws, minutes and the like. You have rights to demand a shareholder meeting and various documents must be maintained of record for inspection. You also have certain rights as a minority shareholder, depending on the facts. Speak with a business attorney quickly.
This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.
2 lawyers agree