S Corporation and Family Feud

[lorenmcguire]

What is the name of your state? Texas
I have a secondary interest in an S Corporation from it's inception. There is a current existing loan for about 60,000 with 4 partners (Owners and Directors) and family members signed on the loan. Recently, the "President" fired the "secretary", my wife, without cause. She still owns 25% of the shares in the business. In addition, the "shares" of actual stock have been "misrepresented" regarding who owns what shares and the tax liability which has been passed through. One of the Partners supposedly gave up their shares to another partner in the business, which is completely against all the "Written By-Laws" of the corporation. In addition, the Tax liability from last years taxes was passed through to all "current" owners as if the Stock was divided into each current owner as 1/3 of the ownership of the total stock. The current status of the business is questionable at best for profitability, but has significant potential provided the current "owners" do not incurr extensive expenses or pay salaries beyond reasonable. I need to get an idea of what my wife's options are at this point to (1) make this business work, or (2) get out of the business without losing our financial stability, or (3) sue the current officers and report them to the SEC.

 

[divgradcurl]

What is the name of your state? Texas
I have a secondary interest in an S Corporation from it's inception. There is a current existing loan for about 60,000 with 4 partners (Owners and Directors) and family members signed on the loan. Recently, the "President" fired the "secretary", my wife, without cause. She still owns 25% of the shares in the business. In addition, the "shares" of actual stock have been "misrepresented" regarding who owns what shares and the tax liability which has been passed through. One of the Partners supposedly gave up their shares to another partner in the business, which is completely against all the "Written By-Laws" of the corporation. In addition, the Tax liability from last years taxes was passed through to all "current" owners as if the Stock was divided into each current owner as 1/3 of the ownership of the total stock. The current status of the business is questionable at best for profitability, but has significant potential provided the current "owners" do not incurr extensive expenses or pay salaries beyond reasonable. I need to get an idea of what my wife's options are at this point to (1) make this business work, or (2) get out of the business without losing our financial stability, or (3) sue the current officers and report them to the SEC.

There really isn't enough detail here to give you any reasonable guidance. Your best bet is to talk with a local attorney, who can review all of the facts of your situation and advise you accordingly. These types of corporate matters involve lots of paperwork -- articles of incorporation, bylaws, contracts, etc. -- and without access to the actual wording in the documents, there isn't any way anyone here can reasonably advise you.