If my friend and I formed a corporation but now he wants to leave the company, what do I need to do to legally sever this relationship and remove him from the company without reforming?

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If my friend and I formed a corporation but now he wants to leave the company, what do I need to do to legally sever this relationship and remove him from the company without reforming?

Is dissolving the company the best way? Since I live in another state, I would also like to move the company here. Do I need to reorganize in this state or can I just simply move the company?

Asked on March 25, 2015 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If the company has no or few assets, the cleanest thing would be to dissolve the existing company and create a new one in the new state.

If there are assets, then you should have your friend sell his shares either to you or back to the company for some amount--it can be fairly nominal, as long as the agreement of sale states that the sufficiency of the consideration (i.e. the payment) is acknowledged--which should remove him from the company. (He should also provide a letter resigning from any position(s) he holds with the company.) Then you can register the company as foreign (i.e. not from that state) corporation doing business in the new state; you would register it that way with the new state.


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