My partner and I own 50/50 shares of an S-corp. Believing I was half owner of the company I have gone into debt and gone without pay to keep...

Question

My partner and I own 50/50 shares of an S-corp. Believing I was half owner of the company I have gone into debt and gone without pay to keep the company running. Just as the company turned a corner and there was money, he locked me out. If the articles stated only 2 people, and we were 50/50 share holders, can he have a meeting without me where he as the director gives himself an extra share, votes his father all remaining shares, makes his father the director, puts him on the board, amends the articles to 5 people, and closes the bank accounts all in the same day? The next day on his way to jail for arson his father lets me go. Is this legal? What do I do?

Answer

Probably not legal. You still own 50 percent of the company... My suggestion is get an attorney...

Answer

Huh? Definitely not legal. A corporation with two stockholders MUST have two (or more) directors. Corporations Code, section 212. Also, co-owners of small corporations are likely in a fiduciary relationship, where the law will require them to act in fairness and good faith toward one another. This should go to a lawyer promptly, and swift and decisive action taken, before things go further awry.

Answer

Simply put, the other shareholder cannot do what you described has happened.

You need to meet with a lawyer immediately to find out your options and help you try to resolve this. Aggressive action needs to be taken so as to minimize the harm to your rights and to the business.