My jurisdiction is: New York State
With the below Shareholders agreement language, can 2 shareholders, consisting of a total of 55% share ownership, involuntarily remove a 45% shareholder?
Our Shareholder agreement states:
(b) Voluntary or Involuntary Withdrawal or Disability of a Shareholder. Upon the voluntary or involuntary withdrawal or disability of a shareholder, the corporation shall purchase the shares of the shareholder so withdrawing or deemed disabled.
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(d) Purchase Price of Share Upon Involuntary or Voluntary Withdrawal, Disability or Death of a Shareholder. The price of the shares shall be determined and paid as follows:
There is no language stating what "Involuntary Withdrawal" is or how it is determined. These are the only 2 references in the Shareholder's agreement.
With the below Shareholders agreement language, can 2 shareholders, consisting of a total of 55% share ownership, involuntarily remove a 45% shareholder?
Our Shareholder agreement states:
(b) Voluntary or Involuntary Withdrawal or Disability of a Shareholder. Upon the voluntary or involuntary withdrawal or disability of a shareholder, the corporation shall purchase the shares of the shareholder so withdrawing or deemed disabled.
...
(d) Purchase Price of Share Upon Involuntary or Voluntary Withdrawal, Disability or Death of a Shareholder. The price of the shares shall be determined and paid as follows:
(1) The price of the shares of a withdrawing, deceased, or disabled stockholder shall be the book value of said shares as determined by a certified public accountant applying generally accepted accounting principles.
(2) The purchase price shall be paid in equal quarterly installments over a period of two (2) years from the date of death, withdrawal or determination of disability of shareholder. The purchase price shall be paid without interest and may be paid in any amount, including the full balance, at any time within the two (2) year period.
(2) The purchase price shall be paid in equal quarterly installments over a period of two (2) years from the date of death, withdrawal or determination of disability of shareholder. The purchase price shall be paid without interest and may be paid in any amount, including the full balance, at any time within the two (2) year period.
There is no language stating what "Involuntary Withdrawal" is or how it is determined. These are the only 2 references in the Shareholder's agreement.
