I am a 50 owner of an s corp. I want to buy out the other 50 from my partner
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I am a 50 owner of an s corp. I want to buy out the other 50 from my partner
He is insisting on what I believe to be an unreasonable valuation. The s corp is
registered in California where I live. He is out of state. I am the President of the
corp. Can I unilaterally dissolve the corp and start a new business in the same
field on my own?
Asked on August 4, 2018 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Unfortunately, as a 50% owner, you don't really have much in the way of options unless you had a written buy-out agreement whose terms you can enforce. Otherwise:
1) Without a buy-out agreement, you cannot compel a buyout or require a specific price (or even a require or mandate some particular methodology for calculating value)--when there is no contract to buy-out, it is voluntary on the part of the owners to work out a buyout.
2) As a 50% owner, you are not a majority owner; not a being a majority owner, you cannot unilaterlaly dissolve the corporation. (It requires the agreement of a majority, or 50.1% or more, of the ownership to do that.)
You and your partner have to work this out between the two of you.
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