If I own 51% of a s-corporation can I fire my partner who owns 49%?

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What can I do?

Attorney Answers

3
Justin Lowenthal ·
Based on the limited facts you provided, if you own 51% of the company, you likely have control over board elections, and thus officer appointments. If your "partner" is an officer, he may be terminated by the board. However, unless he or she has some sort of restricted stock agreement with the company that terminates the right to unvested shares, and those shares have not yet vested, you cannot divest your partner of their 49% stake. Termination of employment might be the only option here. However, if this is a corporation being treated like a partnership, you may want to wind-up and dissolve the company and start anew. If you're thinking about firing a partner, you might want to rethink the partnership all together and start fresh without this individual. Just a thought though. Please see a lawyer about this.
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Sagar Parikh ·
You cannot fire a partner. You may be able to purchase their shares and buy them out, depending on what the Bylaws and any shareholders agreements say.
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David Evan KeystoneBusiness AttorneyOakland, CA ·
You have a controlling interest in a corporation, and your "partner" is a shareholder of that same corporation. As you have the controlling interest, you may be able to fire the other shareholder as an employee of the corporation, but that shareholder will continue to own a 49% stake in it. The Bylaws of your corporation should provide for the methodology for dealing with buying out another shareholder of the corporation. Because you do not have a partnership, the removal of the other shareholder will not cause the corporation to cease. You should definitely consult with a competent business lawyer about the options available to you, and how to successfully jettison the 49% shareholder without creating potential exposure for yourself.
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