Corporate Law Dipping into the Company bank account

[Moody]

I have an S corporation whom I share with my partner. My partner and I have never assigned the shares amongest ourselves meaning he has 0% of the shares in his name and I have 100%. We are both considered President of the company on Division of Corporations. I recently found out that he has been taking money from the account. Given that he has no shares in the company can he take all the money in the company account, take his name off Division of Corporations and not legally get into trouble and start up his own business? When we filed we didn't come to a bona fide agreement.

thanks

 

[Michael Wechsler]

I have an S corporation whom I share with my partner. My partner and I have never assigned the shares amongest ourselves meaning he has 0% of the shares in his name and I have 100%. We are both considered President of the company on Division of Corporations. I recently found out that he has been taking money from the account. Given that he has no shares in the company can he take all the money in the company account, take his name off Division of Corporations and not legally get into trouble and start up his own business? When we filed we didn't come to a bona fide agreement.

An officer of a corporation doesn't have to own 1 share of a company in order to conduct its business. He is an employee of the business. He has powers granted to him by the owner of the company.

That said, if he took the money out of the company for no legitimate purpose, then that could be an actionable claim.