legal, business-structure, buy-outThere is no partnership agreement for our start up incoporation. 2 partners want to buy me out but I’m not accepting that. Can they vote to dissolve the company without my agreeing to it and then reinstate the company without me?
You do not mention the relevant legal jurisdiction (which is of critical importance), but in many jurisdictions your use of language would be confusing: “partnership” and “company” are concepts that are often mutually exclusive.
Anyway, on “dissolution” (liquidation) of whatever entity currently exists, the assets of that entity would have to be sold and the proceeds distributed to the current owners (after all liabilities are settled). If your “partners” want to form a new entity to buy those assets from the existing one, their new entity would have to offer value in return—and it’s always open to you (or another) to make offers too.
Here in the UK, this process would be handled by an independent liquidator who’s under a duty to obtain the best possible value for the entity’s assets—and he can even challenge/unwind any transactions that removed value from the entity prior to his appointment. Thus your “partners” would not be able to simply transfer the assets out of the existing entity for under-value.
All that said, this is a relatively complicated way to effectively “buy out” an existing “partner”. Instead, it is probably in everyone’s interests to try and negotiate a fair settlement rather than pursue such an expensive and potentially contentious approach.
Definitely talk with a lawyer to review what has been said. Even without a formal agreement, emails and verbal agreements matter in court.
That specific move would depend on who owns the IP. If they dissolve the company, then you still may have rights to the IP and that might cause problems for them.
If you’re not able to hire a lawyer or go to court, and a lawyer doesn’t see this as valuable at this stage, usually <$100K, walk away. Write down the date/time of this agreement breach and look up your local laws. There’s usually a 3-5 year time span to sure over an issue like this. If in 4 years and 11 months they’ve made a lot of money, talk to a lawyer and sue them. If not, save yourself the hassle and move on.
I have taken legal advice on a similar situation, in the UK . They cannot do it or rather, they should not be doing it. If they do, they can fall foul of the Companies Act as not acting in the best interest of the company. If they do it, you can contact Companies House. In addition, as mentioned above, any assets get sold and money split according to shareholding. Also, if the company is not in debt, you don’t even need to go anywhere near a liquidator or the official receiver. You just pay off your debts or outstanding invoices, sell assets and wind the company up. The excess cash gets split between shareholders. Liquidation is generally for insolvent companies.
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