Minority shareholder wont sign a contract for a new purchase, what do we do?

My wife and I own 60 of a business, another
person owns 40. We had to make a purchase
and our finance company approved us but our
partner wont sign the contract. Without this
purchase our company is in jeopardy.

Asked on March 14, 2018 under Business Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

If the company is an LLC or a corporation, you don't need his signature or approval for the company to make the purchase: the majority owners of a corporation or LLC can make decisions for the company and have the company buy something or sign a loan/financing agreement even if the minority of ownership disagrees.
However, you cannot make another person personally obligate himself to a loan or debt, even if he is an owner of the business: there is no legal right to force another to take on debt. So if the financing company requires a personal guaranty from all owners, or if you are a partnership and you want or the financing company requires all owners to sign the contract (rather than just you and your wife), he is well within his rights to refuse.


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