Questions

I own a small steak in a startup (~15%) and am leaving the day-to-day running of the company. The majority steak-holder (~70%) is claiming that they have invested more time and resources (debt) and wants to convert it to equity and dilute everyone out. What is my right as a minority steak-holder? Do I have any say? Can they just take what is mine without regard or burden of proof?

The short answer is yes.

The long answer is that it depends on how the business is setup from a legal perspective, bylaws articles of incorporation etc.

You should consultant an attorney to be certain, but as a general rule the majority owners can issues as many shares as they want to whom they wish. Essentially washing out minority holders of equity.


Answered 9 years ago

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