If I’m buying out the minority and only other shareholder in my corporation, what to do if along with our agreed upon purchase price they want 30% of the company’s cash?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If I’m buying out the minority and only other shareholder in my corporation, what to do if along with our agreed upon purchase price they want 30% of the company’s cash?
Is he entitled? I’m a 70% and they are a 30% shareholder. We have no shareholder agreement in place but have verbally agreed on a purchase price for their shares.
Asked on July 19, 2019 under Business Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You and they have to voluntarily work it out--that is, mutually agreed on something. If there is no buy-out agreement, which there evidently isn't, you have no right to buy out a minority shareholder and they have no obligation to sell to you, and no formula, etc. to determine price--if they choose to sell and you choose to buy, it's because you each want to do so, which means you have both agreed on what will be paid. Each can ask for or offer whatever they want. He can ask for the price for the share plus the cash and refuse to sell unless you give him that; you in turn can refused to pay that much and so refuse to sell. Ultimately, as stated, you and he have to work this out between the two of you; the law does NOT fix a price.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.