Owning a business with other people can be a difficult proposition, particularly if you only own just a minority share of a business. You may not have an active role in the business but you still have your own money tied up in its operations. And you can feel trapped if you feel the company is being run poorly and your assets are being wasted, but the other owner or owners may not let you into the management of the company.
We see this situation occurring in family-owned businesses where one or more family members is taking all or most of the cash out of the corporation or diverting receivables to another business owned by them alone. Sometimes a family member sells off assets of the corporation and keeps the money for themselves. Not only does this deprive the other stockholders of corporate returns, if left unstopped a bankruptcy may not be too far around the corner.
Fortunately, if the situation cannot be settled out of court, the Code of Alabama provides relief. State law gives shareholders some options under § 10A-2-14.30:
“The circuit court of the county where a corporation’s articles of incorporation are filed . . . may dissolve the corporation:
. . .
(2) In a proceeding by a shareholder if it is established that:
. . .
(iv) The Corporate Assets are being misapplied or wasted.”
If you find yourself in this situation, give us a call for a free, confidential conference to further discuss your case. We would love the opportunity to help.