There are 4 shareholders in CA C Corp that is suspended. Can a 15% shareholder just give back his stock to the Corp. and retire from ownership? I think he can sell his stock to one of the other shareholders but no one wants it even at $1. I'm thinking that the President can incur liabilities and no one knows what he is doing as he avoids contact with all the other shareholders.
I know it's a lawyer's favorite answer, but it depends. It depends on your organizational documents, it depends on whether you can do anything while the corporation is suspended (revival may be necessary), it depends on what liabilities the shareholder owes to the corporation, and a multitude of other "it dependses.". Sometimes, the shareholder can simply surrender his/her shares to the corporation and voluntarily cancel the shares. This is definitely one of those scenarios that needs more facts. Local counsel should be useful in reviewing all of the corporate documents and assessing what, if anything, can be done. Just a note, if the corporation is suspended because of outstanding taxes owed to the FTB, then usually you cannot revive it until the balance is paid or some agreement is reached with the FTB.
Best of luck!
The preceding is not intended to be, and is not, legal advice. Please consult with an attorney in your jurisdiction for your individual situation.
I advise you to speak with a local corporate attorney regarding your options. He/She will be able to review the Shareholder Agreement, other corporate documents and better ascertain your rights.
Best of luck.
The foregoing discussion does not establish an attorney-client relationship, is qualified by the limited facts presented above, and should not be relied upon as legal advice. To obtain definitive legal advice upon which one can rely necessitates retaining an attorney who is qualified in this particular area of the law. Any comments are merely suggestions for you to think about in discussing your situation with your local attorney.
You need to review the corporate organizational documents to assess the minority shareholder's options. You should consult with an experienced Corporate Attorney.
The foregoing discussion does not establish an attorney-client relationship, is qualified by the limited facts presented above, and should not be relied upon as legal advice. To obtain definitive legal advice upon which one can rely necessitates retaining an attorney who is qualified in this particular area of the law.
Hi there, I agree with the other lawyers--please retain business counsel to review the documents to advise you on the procedure to take... best of luck.
Answer given for general advice and is not a legal opinion, which would require an analysis of the facts and circumstances as well as the applicable law and regulations.
While the corporation is suspended it can not operate and if the President is out representing himself as President of a corporation his acts are not those of the corporation. I would consider calling a corporation meeting regarding resurrecting or dissolving the corporation, in either case, you will need to get the secretary restore the corporations standing to active.
You can also write a letter to the President and other shareholders, telling the former President to stop acting on behalf of the suspended corporation. Go to the secretary of state's website, business search; find the corporation, and copy the page showing that the corporation is suspended. Include that page with your letter, make copies, one to keep and one for each shareholder. Send it certified, this will give evidence that you are not involved in the President's actions and have discouraged them. Good Luck.
Every thing that I am saying here is my opinion and it is not based on any particular case. My response is just unsupported general information. If it helps you to resolve an issue that's great but do not rely on it as legal advice because it is not based on the facts in your case and it is not based on any specific legal research. Answering this question creates no relationship between the writer and reader of the writing. I am not your attorney now, nor have I been on the past. If you just want to comment please do that on AVVO where the price is $0.00. I do typically respond to all AVVO comments.
What you can do should be provided for in the agreement between the shareholders and in the documents under which the stock was issued. If you can deal with those you may not need a lawyer. If, however, those documents do not exist or are silent, then there is a more complex problem here, and counsel is advised.
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