We have a corporation with two shareholders, each having 50% ownership.
Shareholder A is the financial part of the company (credit used to get capital leases, cash influx) Shareholder B is required to work on the jobs.
Shareholder A has been accessing the bank account and transferring money to pay his personal credit card and also placing it in his personal account to spend.
Shareholder B has never agreed to this, and has explained to the first that this cannot be designated as distribution due to several factors: first- when one shareholder takes a distribution, an amount equal to teh shareholder basis is in line for all others; second- according to the IRS, a shreholder cannot "repay" their expenses or take distributions in lieu of paying themselves a salary for services rendered.
There is nothing in the bylaws to state limitations, but the actual Texas Corporation Laws are not know well enough to know if anything can be done to Shareholder A.
Shareholder A is the financial part of the company (credit used to get capital leases, cash influx) Shareholder B is required to work on the jobs.
Shareholder A has been accessing the bank account and transferring money to pay his personal credit card and also placing it in his personal account to spend.
Shareholder B has never agreed to this, and has explained to the first that this cannot be designated as distribution due to several factors: first- when one shareholder takes a distribution, an amount equal to teh shareholder basis is in line for all others; second- according to the IRS, a shreholder cannot "repay" their expenses or take distributions in lieu of paying themselves a salary for services rendered.
There is nothing in the bylaws to state limitations, but the actual Texas Corporation Laws are not know well enough to know if anything can be done to Shareholder A.
