Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.
“Scenario: Two parties own a small start-up business, which is incorporated. Both parties are equal share holders as well as the only employees of the company. Both have equal ownership of all company assets and both names are on the office lease.
Four months prior to the end of the lease, share holder #1 abandons the business, leaving no forwarding address or phone number, forcing the share holder #2 to assume the responsibility for the rent, utilities and other ancillary expenditures. As the business has no reserve funds in the bank share holder #2 pays all bills out of his own pocket. He moves out of the office, turns the key over to the landlord and puts all the assets in an off-site storage facility. Three months go by with no correspondence from share holder #1. Share holder #2 continues to pay the rent until the office is rented one month prior to the lend of the lease by a new tenant.
Question: Under those circumstances, can share holder #2 legally assume ownership of the assets that are still housed in the storage?”
Question: Corporations and corporate officers are bound by an incredibly complex web of responsibilities, laws, and fiduciary duties. You should consult with a corporate attorney familiar with the corporations laws of your state. Generally speaking, it is likely that your safest route is to sell off some of the assets, receive the proceeds into the corporation, and then reimburse shareholder 2 (yourself) from the proceeds. However, to be safest, you should still consult with an attorney in your area, as this may not be the best course of action in your state – in fact it could be a bad course of action. Only an attorney familiar with the corporations laws in your own state can tell you for certain.
