Can I dissolve my corporation, which I own 55 per cent of, then use the intellectual property to start again.?

Question

So I am 1 of 2 founders. I own 55 per cent. There is substantial intellectual property in the form of procedures, websites and software. My partner wants out. Buying him out will put me at a cash-flow disadvantage. He doesn't want the business, nor could he run it himself - although, if he hired someone as smart as me he could. The business is my vision and expertise. He was sales and business operations.

My question relates to the dissolution of the corporation with two scenario's in mind.

1. If we sell all assets, pay all debts and walk away, can I use any of the documentation to build my new company with the same vision.

2. If he buys me out (we have a shotgun clause), would I have to re-create all these documents from scratch or can I use them in any way?

Are these subject to negotiation?

Thanks

Answer 1

If you sell the assets to anyone with a grain of sense you will have to include the intellectual property and sign a non-compete agreement which most likely will bar you from competing with the buyer for a five year period.

The corporation -- not you -- owns the intellectual property and if you sell your stock and then go into competition you will leave yourself open for a lawsuit that in all probability you will lose.

The best thing for you to do, assuming the business is profitable, is either find another investor or arrange for long term financing and buy his stock either as an individual or have the corporation buy it back.

Hope this helps

Jerry-the-bookkeeper