If I want to close down our S-Corp and I own 90% of the business, can I close it without my partner’s agreement?
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If I want to close down our S-Corp and I own 90% of the business, can I close it without my partner’s agreement?
I am divorcing my husband who is also 10 owner of our company. It is a very small door installation company. We have just 3 employees, including me and my husband. He does not want the company and instead wants to make it not worth anything so it cannot be used as an asset in our divorce. Unfortunately, his behavior has worked; it has caused backcharges and labor issues. There is no money in the bank and since he is the producer and not showing up for work, we are getting notices of delinquency and back charges. I want to just close the business immediately, like today. Can I and , if so, how do I?
Asked on July 13, 2018 under Business Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Yes, you can close it without his consent: a majority owner has the right to shut down or close (or sell, if there was a buyer) a business with the minority owner's consent; your obligation in that regard, to the minority owner, is to pay him his share of any money left in the business after it is wound down, or his share of any purchase price.
As to the mechanics of doing it, there are several steps. You have to give all shareholders notice (at least 10 days) of a vote to dissolve; then you need to take a vote (and keep records of it); then you file "Articles of Dissolution" with the state. Once you do that, you still need to "wind up" the business: collect any remaining monies coming in (e.g. accounts receivable); sell anything (e.g equipment, inventory) you intend to sell to raise more money; pay any outstanding debts to the greatest extent possible; then if there is any money left over after that, you can distribute it to the shareholders in their respective proportions. It is also strongly advised to provide proper notice to creditors that you are doing this, to give them a chance to put in their claims--this will help make sure that you do not incur any personal liabiltity from--even inadvertantly--putting yourself ahead of creditors.
The best thing to do is hire a corporate attorney to help you with all these steps and procedures, and to make sure you have done everything write. If determined to do it yourself, you should be able to get much of the necessary information from the state (e.g. from the dept. or secretary of state website).
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