Can my father gift 10% of the family company to me with a clause that states he can take it away at any time with no compensation?
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Can my father gift 10% of the family company to me with a clause that states he can take it away at any time with no compensation?
He gifted 10% with a clause that states for any death, voluntary or involuntary withdrawal will leave the main shareholder(him) with the right to take back the 10% share at my investment or up to $10,000 whichever is lower and at his discretion. Can he do this? It sounds like a contrary to itself within the contract. How do I get my owed 10% of the value of the company?
Asked on January 13, 2012 under Business Law, New Jersey
Answers:
Michael Duffy / Duffy Law, LLC
Answered 12 years ago | Contributor
A "gift" isn't really a contract, but in case case: A more likely result would be the the contract would be unenforecable. If he can take it away at his will, your father didn't really give you anything. If it was disputed in court, the court would far more likely find that there was no contract, rather than modifying the contract to eliminate his right to take back the share of the company.
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