Can i as a majority owner (51%) of an s corporation, force a byout from my partner(49%)due to his inadequacy?

Question

There is nothing stated in our bylaws about a byout nor do we have a buy/sell agreement. do i still have the right to force a buyout?

Answer 1

NO!

There are NO duties required of a shareholder except to report taxes on earnings.

If they are a Director of the Corporation, A shareholder meeting may be called, and a vote taken to remove them as a director. If the vote passes, they will be removed as director.

If they are an Officer of the corporation, a Board Meeting may be called to vote to remove that person as an officer of the corporation. If the motion passes, they will be removed. The actions of the boards will eventually have to be approved at the next shareholder meeting.

As a 49% shareholder, that person also has the right to request a special shareholder meeting.

You may make that person an offer to purchase their shares, and IF they accept it, the board will have to approve the transfer and log it in the Corporate Stock Transfer book.

All shareholders MUST be notified of any shareholder meetings by the corporate secretary, or sign a waiver of notice at the meeting, or any actions taken at that meeting will be void. So don't even think about not notifying that person.