What legal avenues doI have to obtain full control of my business from a minority owner thatI believe is causing me to lose money?

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What legal avenues doI have to obtain full control of my business from a minority owner thatI believe is causing me to lose money?

I own 51% of my company, the co-owner who owns the remaining 49% was managing the company while I was taking care of my brother’s children for the last few days. During my absence one of the boats that we use leaked half of its diesel fuel into the lake causing several thousands of gallons to be wastedand several thousands of dollars to be lost in environmental cleanup of the spill. Furthermore, over the past year several large repairs were required because they were not caught as small issues while under his oversight of the day-to-day operations. For these reasons I can no longer trust him.

Asked on August 4, 2011 Wisconsin

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You are the majority owner with 51% ownership in the business. Advise the minority interest owner that you are now making all the decsions about the business and its day to day operations and the reasons for this (his or her poor judgment). Put this in writing and keep a copy for future need. Assume control of the day to day operations of the business.

Do you have a written business agreement between you and the 49% co-owner if your business structure is not a corporation or a limited liability company? If so, read it in that the written agreement should set forth how to eliminate your co-owner from the business altogether.

If your business is in corporate or limited liability company structure, read the bylaws or operating agreement to see the ways to "buy out" the 49% co-owner. If you do not have a written business agreement with your co-owner, or if your business is not a corporation or a limited liability company and you want to get rid of your co-owner, you have some challenges in such an endeavor warranting a retention of a good business attorney.

Good luck.


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