If we are a corporation of 3 partners and 2 of us would like to remove the third from the corporation, what do we need to do in order to remove this person?
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If we are a corporation of 3 partners and 2 of us would like to remove the third from the corporation, what do we need to do in order to remove this person?
We have a simple incorporation and are operating under standard by;aws.
Asked on April 14, 2013 under Business Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You can't remove him unless there is some agreement (e.g. a buyout agreement) allowing a majority of the owners to remove/buyout a minority of owners; the fact is, he owns some percentage of the corporation (1/3, if you split it evenly), and you can't make him give up his ownership unless there is some agreement to that effect in place. You can of course try to negotiate a voluntary buyout of him--come to an agreement under which the two of you will purchase his share. You could also seek to dissolve the corporation and look to start a new one with just the two of you, but you'd have to resolve issues like who gets ownership of any intellectual property, good will, customer lists, etc.
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