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Can co-founders move company and leave me with shell-company?

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simon23

Junior Member
[Business Law]

I founded Company A with two friends and am currently holding 1% of the company shares. My two friends are both appointed as Managing Directors, I am only a minority shareholder and do not work in the company. The company does not have any assets other than about 2000USD that are left from a Kickstarter Campaign in which it collected 10000USD for the pre-sale of protein bars that have not been delivered yet.

When I refused to sell my share in company A to them, my friends wanted to have me out of the company. So they changed the name of company A and founded another company, company B (in which they are the only shareholders), with the name that company A originally had. All the assets of company A (cash) were transfered to company B as part of a contract between A and B accordingt to which B would fullfill A's preorders on behalf of A. They are effectively continuing the business of A under the new company B. Now, they have even applied for a trademark on the brand that company A used for the Kickstarter campaign (but didn't have a trademark for). Meanwhile, I am left with a 1% share in A, which is now effectively a shell company.

Can I, as a minority shareholder, legally compell the two other guys stop company B's trademark process as part of their roles as (still) Managing Directors of company A? Can I sue for any kind of compensation for myself whatever? Any reccommendations?

I look forward to your response.

Kind regards,
Simon
 


adjusterjack

Senior Member
Can I, as a minority shareholder, legally compell the two other guys stop company B's trademark process as part of their roles as (still) Managing Directors of company A? Can I sue for any kind of compensation for myself whatever? Any recommendations?
Yes, hire an attorney.

You probably do have some recourse but you're going to need an attorney or you will get nowhere.
 

quincy

Senior Member
[Business Law]

I founded Company A with two friends and am currently holding 1% of the company shares. My two friends are both appointed as Managing Directors, I am only a minority shareholder and do not work in the company. The company does not have any assets other than about 2000USD that are left from a Kickstarter Campaign in which it collected 10000USD for the pre-sale of protein bars that have not been delivered yet.

When I refused to sell my share in company A to them, my friends wanted to have me out of the company. So they changed the name of company A and founded another company, company B (in which they are the only shareholders), with the name that company A originally had. All the assets of company A (cash) were transfered to company B as part of a contract between A and B accordingt to which B would fullfill A's preorders on behalf of A. They are effectively continuing the business of A under the new company B. Now, they have even applied for a trademark on the brand that company A used for the Kickstarter campaign (but didn't have a trademark for). Meanwhile, I am left with a 1% share in A, which is now effectively a shell company.

Can I, as a minority shareholder, legally compell the two other guys stop company B's trademark process as part of their roles as (still) Managing Directors of company A? Can I sue for any kind of compensation for myself whatever? Any reccommendations?

I look forward to your response.

Kind regards,
Simon
Where are you located, Simon? If in the US, in what state do you reside and do business or, if in another country, in what country do you reside and do business?

When Company A operated its business under a name, that name was Company A's trademark. A trademark is a company's business (products/services) identifier. In the US, a trademark does not have to be federally registered to gain trademark rights. The rights are gained through the use of the trademark in commerce. It will generally be the first to use the mark who is the owner of the mark (there are exceptions). But trademark laws vary from country to country and, in most countries, registration is what matters when determining ownership of a mark.

There is a lot that you have presented here that needs to be examined more thoroughly to determine what sort of legal problems have been created with the Managing Directors' actions. What seems clear, though, are that legal problems have been created. Trademark ownership could be the least of the problems.

I recommend that you seek out a personal review of businesses A and B and the actions of the Managing Directors from a business law professional in whatever part of the world you happen to reside.
 

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