Rights of Minority Shareholders in New York: Grounds for Judicial Dissolution
What You Need To Know About Your Rights as a Minority Shareholder Minority shareholders who own and hold between 20% to 49% of the outstanding shares of stock in a New York corporation are afforded the critical right to seek "judicial dissolution" under New York Business Corporation Law Section 1104-a. Pursuant to Section 1104-a a minority shareholder or shareholders who own and control at least 20% of the corporations stock may seek dissolution based on one of the following grounds:
(1) The directors or those in control of the corporation have been guilty of illegal, fraudulent or oppressive actions toward the complaining shareholders;
(2) The property or assets of the corporation are being looted, wasted, or diverted for non-corporate purposes by its directors, officers or those in control of the corporation.
For minority shareholders of small closely held businesses, the dissolution rights afforded under Section 1104-a represent a substantative legal right that must be evaluated when faced with a serious dispute with your partners/shareholders.
Additional Articles by Partnership Lawyer Charles N. Internicola, Esq. For additional information and articles by Charles N. Internicola, Esq. about partnership and shareholder disputes, we recommend:
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