How do you Get Rid of?

Nuevolution

Hey Fellow Sunnies,
I have a dilema that perhaps someone out there can help me out
with. My question is as follows: How do you get rid of a
non-responsive, irresponsible member of your corporation (board of
directors). How do you fire, a board member and what are the legalities
to do so?
What if the so called board member owns 20% of your corporation? But he
isn`t putting in his 20% (time, cash, etc.) How do you give that person
the boot? is it easier to dissolve and start a new corp? or as 80%
owner I decide who stays and who goes?
Please help any advise would helpful at this point.

Nuevolution2007-5-17 2:39:33

InactiveMember

Do you have governing documents or a partnership agreement that deals with this situation? If so, follow the procedure outlined therein. If not ... you might be in a tough spot.

Nuevolution

No, NO governing document, he does own 20% of the company which was
given to him by me as a "token of appreciation" But as far as him being
one of the owner as to say he started the business out with me, or he
dished out money to get the business going "NO".. I had already been in
business 4 years prior to that.
As I`ve said here on the forum I started my business with $250.00 and
turned it to a profitable / established business. What`s funny about
this situation is that he doesn`t do nothing, he says he`s 20% owner,
but he won`t dish out the cash that he owes. The Original agreement was
that he took care of some small fees for the company about $80.00 bucks
a month to be exact. He`s never even paid $1.00 dollar to his
commitment. But yet wants to write it off on as his expense.
See where Im getting at?
NIKOLE, that`s what I thought! they only sit there and do nothing.

Nuevolution

No, No, No it`s not like that.
We went to college together and seeing that he was struggling(making
ends meet), So as a long time friend not any dweeb of the street
either, we went through alot in college. I decided that I would give
him a percentage in return for his expertise and for a small amount of
cash(investment), and a mutual aggreement that he would run a certain
part of the business. Which he never stepped up to his responsabilities.


So I guess the only way is to buy him out huh? $600.00 bucks is nothing
comparing to what I can loose in the long run.. Thanks guys...

drvag

If you can buy him out for $600, than I`d do it quick.  But I would probably consult an attorney first so there are no problems later.
Board of Directors do "do something".  In the real world, they challange the CEO/President as to the strategic decisions they are making.  But as you see in many large corps, they usually rubber stamp the CEO and their actions.
There is nothing wrong, especially for a young growing company to have what I would call a Board of Advisors.  Not Directors.  Find 4 - 5 successfull business people that you know and admire with varying skills (marketing, accounting, operations, etc) and preferably in different industries/ markets.  That way you get a nice cross section of knowledge and advice.
And don`t just pay them to be there.  They should want to help you.  If you want to reward them, come up with some token arrangement based on performance of the company over 3 - 4 years.  And certainly not 20% of the company.  And it`s OK to invite them out of the group if they don`t add value or constantly blow you off.
Hope this helps.
 
 
 

patentandtrademark

I saw where Tony Soprano helped somebody  in your position - but the guy had to give Tony part of a hotel or some cash.

Angi6542

My problem is almost the same except she owns 1/2 of the business!  I know, I know, I was stupid going into it with her.  She does the accounting, but never is at the shop.  Everyone thinks that I own it alone.  I do all of the work and she is clueless!  Drives me insane.