I own a business with my brother. We each have a 50% stake. Recently he has been making decisions that I think will hurt the company and my stock value. I want out. We don't have a buy/sell agreement. Not only am I a shareholder, but also an officer (VP). Can I try to have the business administratively dissolved? As a shareholder, I want to liquidate my stake before it tanks. But, do I also have a duty to do what is in the best interest of the company?
More information is needed to properly evaluate best game plan, so discuss it in full with a local business lawyer.
The answer differs slightly depending on whether it is a partnership or corporation. The other questions that need to be addressed are whether there is enough value in the entity to pay for the litigation and leave anything for you when it is done, and what kind of exposure you have for company liabilities if you don't get out. Consult a business litigator. Good luck.
This answer is provided for general information only. No legal advice can be given without a consult as to the specifics of the case.
As others have stated, additional information is needed. For instance, fiduciary duties can and do differ from state to state, and thus, it is important to review the scope and applicability of fiduciary duties for the state in which the corporation is incorporated (typically courts will look to the state of incorporation for purposes of determining which state law to apply when an "internal dispute" arises). Generally, speaking however, and subject to applicable law, directors and officers in a corporation owe fiduciary duties (including the duties of care and loyalty) to the corporation in which they serve. One legal question that you will likely encounter as you evaluate your brother's activities is whether his actions are protected by what is commonly known as the business judgment rule. In the end, and while I have handled many of these types of cases, without more information one cannot fairly and fully address your question.
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