Should we start a new corporation because of a unresolvable dispute with 1 out of 6 business partners?

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Should we start a new corporation because of a unresolvable dispute with 1 out of 6 business partners?

I currently have a corporation with 6 business partners that have equity and things are not working out with 1 of them. They have not been doing the work they promised. The company has not launched yet but the partner that does not want to leave has put in some money. The person is shareholder and officer of the corporation. However they are not on the board of directors. The board as well as the rest of the shareholders sent him a resolution offering him his money back, as well as compensating him for his time but they do not want to leave.

Asked on April 11, 2012 under Business Law, Illinois

Answers:

Glenn M. Lyon, Esq. / MacGregor Lyon, LLC.

Answered 8 years ago | Contributor

 

Depending on the authority granted by the corporations internal documents (by-laws, shareholders agreement, etc.), you may be able to dissolve the company and move on to start a new one. If not, you and the other partners still have the right to start a new company, but you must be careful not to create any minority oppression liability by negative acts against the other shareholder.


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