If I am involved in a business that is not abiding to financial obligations, can I legally sell company assets to get my money?
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If I am involved in a business that is not abiding to financial obligations, can I legally sell company assets to get my money?
Asked on September 26, 2012 under Business Law, New Hampshire
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Are you the sole owner? Then clearly yes, you could do this--just be careful of any tax consequences to yourself and the business.
Are you the majority owner? Then you may be able to do this, though you will have to act in a way that fulfills your fiduciary duty to minority owners (basically, is prudent and fair); however, as a majority owner, you'd almost certainly have the authority to do this, subject to any limitation in articles of incorporation, the agreement setting up the LLC, or other agreements/contracts.
If you are not the sole or majority owner, however, you may not do this unless 1) there is some contract or agreement (a financing agreement, for example, between you and the business giving you the right to do this) or 2) the majority owner(s) give you the authority to do this. Without 1) or 2), however, a minority owner (or a lender) has no right to sell business assets.
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