If I close my business, will my partners be entitled to my assets in the company? 8 Answers as of January 18, 2011

I have 2 partners in the corporation. I am the only one with money still in the business. We are closing the business. Are my partners entitled to there percentage of the bank account and assets even though they got all there money out and the money in there is from what I invested?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
I do not have enough information from what you have said to answer the question. Generally, in a corporation, shareholders do not have any right to property of the corporation until it is wound up and all of its debts and taxes have been paid. At that point, if there is anything left, the corporation can redeem their shares, each share being treated equally so that the distribution is according to the number of shares each party holds.
Answer Applies to: California
Replied: 1/18/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
This depends on state law and there's nowhere near enough facts to answer your question. Creditors are entitled to the company's assets first, so if your partners are owed money, then they could share in the distribution with the other creditors.
Answer Applies to: California
Replied: 1/17/2011
Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
What, if anything, that your fellow shareholders are entitled to is complicated. It depends an all of the assets and debts of the corporation, as well as all money paid in and taken out by all shareholders. It is not possible for me to answer your question without knowing more about the facts of your matter.
Answer Applies to: California
Replied: 1/17/2011
Gus Johnson Attorney at Law
Gus Johnson Attorney at Law | Gus Johnson
First of all, not a bankruptcy question. second, you don't have partners in a corporation, I recommend that you consult with an attorney in your state of residence.
Answer Applies to: South Dakota
Replied: 1/17/2011
Carballo Law Offices
Carballo Law Offices | Tony E. Carballo
It does not sound like your partners would be entitled to anything but depending on the amount involved you might have a dispute with your partners over what each is entitled to receive upon dissolution of the corporation. You should always put things in writing because when things do not work out there is a great potential for those kinds of disputes. If it is a corporation there should have been stock issued and whatever was put into the business should have been reflected in the number of shares each received. Your partners should not have been allowed to get anything out because it all belonged to the corporation and they had no right to take corporate assets without approval by all the corporation owners or the board of directors depending on the type of corporation. Therefore, when they make a claim against you there should be an offset for whatever they took out already. You need to discuss the situation with your ex-partners and come to an agreement to avoid an expensive legal battle.
Answer Applies to: California
Replied: 1/17/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    The simple answer is "No" they should not get the money or assets, based on your question. You should however see a lawyer if the assets and funds are significant.
    Answer Applies to: California
    Replied: 1/17/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    That will depend on your incorporation documents and operating agreement.
    Answer Applies to: New Hampshire
    Replied: 1/17/2011
    Law Offices of Steven A. Wolvek
    Law Offices of Steven A. Wolvek | Steven A. Wolvek
    Your question did not mention bankruptcy so I am not sure if you are contemplating that or not. If no - your question is better directed to a corporate attorney.
    Answer Applies to: California
    Replied: 1/16/2011
Click to View More Answers: