How do I remove a shareholder from my corporation?

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How do I remove a shareholder from my corporation?

I am 65% owner of a corporation in New York State and my partner is 35%. He recently violated my trust by using our business bank account for personal expenses. His attitude about it has raised a lot of concern and I don’t feel comfortable with him as a partner anymore. His actions have pretty much washed out our business account so I’m looking for the easiest way to get him out of the company. I know issues like this aren’t exactly easy in nature but I’d like to keep moving forward with my business but have no clue as to what my options are.

Asked on September 8, 2010 under Business Law, New York

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Do you have a partnership agreement?  Does it speak to the issues here?  If you do or you do not - either way - I would seek help from an attorney that deals in partnership law.  You may have to "buy" him out. If he embezzled from the corporation you have options there without a doubt.  You will also have bargaining power in "buying" him out with the funds - possibly - that he already took in lieu of pressing criminal charges.  Make sure that you at least have an agreement relinquishing his rights to  the business for whatever the consideration you decide (not pressing criminal charges is not consideration but the money already taken is) and make sure that he is represented by an attorney.  Good luck. 


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