Expert: Charles W. Field - 5/21/2010

Question
I co-own a very small, young business. It has yet to generate a profit. I put in all of the start-up capital and 100% of my time. My partner put in a little time and recently pulled out of the company's management and operations altogether, so I am running the company exclusively. An early agreement unwisely reflected an even split in ownership, and this was updated with a new agreement that gives me majority ownership.

Now, months later, he's become threatening. It's disrupting the business, he's claiming the new agreement is null and void (though I have several signed copies), and I'm concerned he will try to sabotage the business. Since I run the business and paid for all of the assets personally (there's a significant promissory note due to me), and since the business isn't generating a profit yet, can I dissolve the corporation and run it under my own?

Answer
Short answer: you probably win. Whether the business is generating a profit or not is immaterial; if you own the majority of the stock, you can probably dissolve the corporation.  However, since corporation laws vary from state (and I only know GA law, since that's the only state in which I practice), you should consult with a local attorney. Also, you might want to consider getting a temporary and/or permanent injunction to prohibit him from doing anything to sabotage the business.