Corporate Law S corp..One partner quitting business

[ozzygirl]

MY husband and his brother have been partners in our business. We formed an S corp. 10 years ago. His brother just informed us that he is quitting the business. We will go on doing business at the same address without him. My question is how to remove him from corp. and also is it possible to change the name of the business without much difficulty? We are a used car dealer and have been in the process of splitting up inventory and have our CPA working on the books. We want to buy his part of the property and buildings that we have but he will not agree to that even though he will not be there. Any thoughts would be appreciated.

 

[jharris352]

Check your bi-laws. There should be a way of dissolving the corporation and paying out the shareholders. If the other shareholders have a majority stake the bi-laws can be changed if necessary. BEWARE! Do not do anything that would diminish the value of the minority shareholder's shares. A minority shareholder suit is a bear to deal with.

Don't look for easy ways out. Dissolve the corporation, take the assets that are yours and start a new one. Good Luck.

 

[ozzygirl]

There are just 4 of us. We all have equal shares. Thank you for the info.

 

[jharris352]

Even though you have equal shares, if 3 of you are seen as ganging up on the forth one he becomes a minority share holder. Good luck.