Sale of minority stock in California; I own 40% of an s-corp.

mariet · Jan 27th, 2012, 07:22 PM

I own 40% of an s-corp. I am negotiating the sale of my stock to the majority share holder. I have been offered $300,000 now and $300,000 in 6 months if I sign a stock plege for the installment period. His lawyer is stating that it needs abide by Corporation Code 500, et seq. How can this affect me? Does it give him a way of not paying the second payment for my stock? It appears he is offering 600,000, and that is what I am willing to take...just worried that I am being out-smarted somehow.

AFFA · Jan 27th, 2012, 10:51 PM

I wish to inform you that California Corporation Code 500 provides that neither corporation nor any of its subsidiaries shall make any distribution to the corporation's shareholders other then the exception provided in this section. It is not related to the sale of shares or its consideration.

AFF

mariet · Jan 28th, 2012, 07:43 PM

is this true of all the section 500s?

Jan 27th, 2012, 07:22 PM	#1
mariet Junior Member Country: Join Date: Jan 2012 Posts: 2	Sale of minority stock in California; I own 40% of an s-corp. I own 40% of an s-corp. I am negotiating the sale of my stock to the majority share holder. I have been offered $300,000 now and $300,000 in 6 months if I sign a stock plege for the installment period. His lawyer is stating that it needs abide by Corporation Code 500, et seq. How can this affect me? Does it give him a way of not paying the second payment for my stock? It appears he is offering 600,000, and that is what I am willing to take...just worried that I am being out-smarted somehow.

Jan 27th, 2012, 10:51 PM	#2
AFFA Top Level Member Join Date: Dec 2009 Posts: 12,619	Re: Sale of minority stock in California; I own 40% of an s-corp. I wish to inform you that California Corporation Code 500 provides that neither corporation nor any of its subsidiaries shall make any distribution to the corporation's shareholders other then the exception provided in this section. It is not related to the sale of shares or its consideration. AFF
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Jan 28th, 2012, 07:43 PM	#3
mariet Junior Member Country: Join Date: Jan 2012 Posts: 2	Re: Sale of minority stock in California; I own 40% of an s-corp. is this true of all the section 500s?
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Sale of minority stock in California; I own 40% of an s-corp.

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