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Up until 8 years ago I was the corporate secretary in my family business. The corporation was formed by my two sisters 25 years ago. The company took out a loan 10 years ago, and they told me I had to sign as the secretary. Now they're telling me that they paid off the loan and I owe them for my share of the loan. Can this be correct? I'm not a shareholder.
That's really one for a lawyer to handle. Unless your name was on the loan, there should be no reason for you to reimburse anyone.
It appears she signed it as secretary and so she is responsible. If I am correct your sisters are asking you to pay back your share, this is not coming from an outside creditor -?
A secretary is an officer of the company and does not create personal liability. The only way you are responsible for paying back any part of the loan is if you are a shareholder or if you signed the note individually in addition to your capacity as secretary.
In my view, when you signed the note, you signed as the secretary of the corporation. In so doing, you obligated the corporation - NOT yourself. Unless, of course, you signed a personal guarantee, and it doesn't appear that you did.
If your sisters paid the loan back from personal funds, and not corporate funds, and think they should be reimbursed, it would be the corporation that owes them, not you. But if the corporation paid it, that's the way it should be. You don't pay any other corporate bills, do you? Why should you pay this one?
A secretary is an officer of the company and does not create personal liability. The only way you are responsible for paying back any part of the loan is if you are a shareholder or if you signed the note individually in addition to your capacity as secretary.
It has been a while since I took Corporations, but aren't shareholders limited in liability only to the extent of there investment? Unless the corporate veil can be pierced, they, as well as officers and directors, cannot be held personally liable.
Any in case, none of those principles would apply since this is not an outside creditor looking to collect a debt. Your sisters only have a leg to stand on if they have documents stating you signed on for a portion of the loan outside of your corporate responsibility.
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