There are many complicated matters that may arise between minority shareholders, members and partners. If your partners want you out of the business, or if they want to limit distributions to you, they may stop at nothing to achieve their goal. It is common for partners to engage in oppressive business acts to inspire minority shareholders to leave.
Here are a few examples of oppressive actions majority partners may employ against minority shareholders:
Fortunately for New Yorkers, there are statutory laws in place to protect minority equity holders. New York law requires majority members to provide a duty of good faith and loyalty to minority shareholders. That means that the majority must act in the best interests of the business at large and not just in the interests of any particular shareholder group. Issues arise when decisions are made that benefit majority shareholders and not the business itself.
Therefore, if the majority shareholders are acting in a manner that benefits them but hurts the business, you can take action. If you are a minority shareholder who is losing control because of oppressive acts, contact an experienced New York business attorney right away to learn about your legal options. If you are being pressured to leave through oppressive action, you must fight back before it is too late. They may be time to create a proactive plan and course of action that keeps you in play and protects your ownership interests.
Category: Partnership Disputes
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