Many attorneys and business owners look to the Arizona statutes and disillusion has swords for minority shareholders to potentially break deadlock, but do not look at the down side of such actions based on the same statutory framework. Other statutory provisions allow a corporation to, after the filing of a judicial dissolution action, purchase the shares of the dissenting shareholder for fair value, which is decided by the judge, who is entitled to set the price and the terms of sale. This makes the filing of a judicial dissolution action potentially problematic for minority shareholders. There are strategies and ways to structure corporations in their bylaws to avoid this issue.
The point is that whether you’re dealing with majority owners or minority owners in a corporation that sophisticated planning can be done either in forming the corporation or amending his bylaws depending on your clients position. If you have clients who may need assistance either selecting the proper form of organization for their business or drafting documents for a new or existing business to protect their specific interests, please keep me and my firm, Jaburg Wilk, in mind.
If you have any questions or want to discuss these type of issues, please call me at 602-248-1009.
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