Shareholders Rights

[CWS]

Earnings in this business are kept in the store to help improve cash flow. Can a shareholder holding 51% stock in an "S" Corporation freeze withdrawals from other shareholders when those earnings have already been reported to IRS on a K1?

 

[ed]

Whether or not the 51% shareholder can refuse withdrawals from the other shareholdeers depends on the corporate situation. The fact that earnings are reported to the shareholders on K-1s is not relevant to this issue. Earnings are "passed on" to the shareholders as they are earned by the corporation, not when the actual cash is withdrawn.