Corporate Law shareholders

[gevolt]

My jurisdiction is: ILLINOIS

My company (name "X") has two Founders and two Directors - myself and my friend. We have 10 full time employees. My friend is the President and I am VP and the Treasurer.
We offer all kind of internet and computer related services.
While ago my friend emailed me that he opened a photo service company – name "Y".
Last month he decided as the President that our company "X" would start to offer photo service as a part of web design services.
Next, he used his personal company "Y" equipment to perform photo service for one of our company customers as a part of updating web site. He sent an invoice for the usage of his company "Y"equipment to our company "X" and approved to pay it.

Do I have a chance to get his employment terminated by reason of competition?

 

[dee_dub]

What does your partnership agreement say?

I'm going to go out on a limb here and say you probably can't fire him, because he's the president and he outranks you.

I think your remedy lies in shareholder rights law, not in employment law. He has certainly violated the spirit if not the letter of your agreeement to form a company. At a minimum, he is an owner/director of a company that offers services directly in competition with yours, and he has breached the fiduciary duty he owes to X by funnelling business to Y.

I don't know what to tell you about the bill for use of Y's equipment - the facts are not clear to me. Why would X be liable for using Y's equipment when it was Y performing the work?

 

[traffic101]

Get with your corporate attorney and have it interpreted so that you understand what your options are. Good luck.