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dennis321 · Mar 30, 2010, 11:27 AM

I have a business partner in an S Corp. plus a soon-to-be non-profit (waiting for the 501c3 filing to be done). She told me on my cell-phone voice mail that SHE is dissolving the businesses! (Due to her not doing a thing, we have made NO money in the past 3 years, and her acct. advised her to close up shop). I am the CEO of the S Corp. (my innovation, product & talent) and the President of the foundation (my cause).
Her husband is an attorney.
I have bills I never submitted for approx. $33,000 for labor of prototypes, samples, etc. -since we had no $ and I have the skills to create them. They (husband & wife) have paid approx $1,300 in fees for 501c3 filing, etc.
I am infuriated that she left me this message, as well as causing me to not make any income as she no sooner signed our bus. Agreement than she began to shirk all responsibilities. They're complete con-artists, and I would love to sue them for lost income plus my expenses, and use this against the $1,300.00 they spent.
I cannot get her to return my phone calls, and I have NO information on the filing, no contact info and no phone numbers.
Any suggestions as to what to do? (I agreed with her acct. to sign a paper today, stating that I'm OK with dissolving the corp. (I'll just add another DBA to my own existing business at a later date).
Thanks,
dennis321 (p.s. I'm a female! )

JudyKayTee · Mar 30, 2010, 04:40 PM

When there's an Attorney on the other side I always recommend an Attorney on your side.

dennis321 · Mar 30, 2010, 05:22 PM

Thank you, I agree. Unfortunately, I am also in the middle of a horrific divorce (divorcing a Narcissist who has pretty much taken all my money)... and I can't afford one. I am in the throes of trying to find one who doesn't charge for a consult, let alone doing this on "consignment".

AK lawyer · Mar 30, 2010, 05:23 PM

Originally Posted by dennis321

I have a business partner in an S Corp. plus a soon-to-be non-profit (waiting for the 501c3 filing to be done).

She told me on my cell-phone voice mail that SHE is dissolving the businesses! ... and I have NO information on the filing, no contact info and no phone numbers.
Any suggestions as to what to do? (I agreed with her acct. to sign a paper today, stating that I'm OK with dissolving the corp. ...

A non-profit is effectively created when the articles of incorporation are filed with the state (which state, BTW?). The 501(c)(3) paperwork is normally done afterward with the I.R.S.

First, I would check with the state to see if indeed articles of incorporation were filed creating these entities. Most states make this information available online. At the same time you can confirm your understanding of who the corporate officers are. If it was not done, it would appear that what they really mean is that they are not going to go through with the incorporation process as planned (rather than dissolution, which in itself is a complicated process).

dennis321 · Mar 30, 2010, 07:12 PM

AK-

Thank you for your response. The dissolution is for our S Corp. not for the non-profit. I do know that the articles of incorporation were in fact filed (New York). It is currently in the hands of the IRS. What I'd like to know at this point is, can they do anything to "sabotage" the filing procedure; can I get any information on whom to call (as they will not contact me to provide me with any info.) and... if and when the filing DOES come through, will it matter that they (she) has "removed" herself from this incorportion? (Is her name, and also her husband's... he's also named on the Board) - still there? Can I fire them?

Thanks -

AK lawyer · Mar 30, 2010, 07:29 PM

Originally Posted by dennis321

AK-

Thank you for your response. The dissolution is for our S Corp. not for the non-profit. I do know that the articles of incorporation were in fact filed (New York). It is currently in the hands of the IRS. What I'd like to know at this point is, can they do anything to "sabotage" the filing procedure; can I get any information on whom to call (as they will not contact me to provide me with any info.) and.... if and when the filing DOES come through, will it matter that they (she) has "removed" herself from this incorportion? (Is her name, and also her husband's... he's also named on the Board) - still there? Can I fire them?

Thanks -

As for the profit corporation then,
You are an officer. Does the articles filed with the state name the other officers?

Has stock been issued? Because normally only shareholder would be able to, at a shareholder meeting, fire the directors. The board of directors, or the shareholders, depending on the wording of the articles or by-laws, would hire and fire the officers. If stock has not been issued, the incorporators probably would be in control.

Do you have a copy of the by-laws?

dennis321 · Mar 30, 2010, 07:39 PM

I have the corporation papers, I'm not in my office but I'm almost positive I have a copy of the by-laws also.
No stock has been issued. I guess my question is, do I need to keep them on the board - they'll never show up for meetings and will never respond to anything. (just a thought... anything I could do to make it "uncomfortable" for them?). Sorry, but they've just put me through hell.

As for the profit corp - I sent her acct. a letter today stating I'm OK with the dissolution. My accountant and I will apply for a DBA soon to "re-instate" the company.

Fr_Chuck · Mar 30, 2010, 08:08 PM

You are a non profit corporation, the minute that the state accepts your filing for a non profit corporation.

The 501C status merely allows you to receive tax exmpt donations, does not effect your corporation filing.

I file my own non profit filings, costs less than 200 unless you are doing it out of state.

But if you have debts owed to you by the corporation, unless there was a written agreement between members of that group, the business owes you the money, not the other partners,

If the business has no money, you are normally just out your debt.

AK lawyer · Mar 30, 2010, 08:35 PM

Originally Posted by dennis321

I have the corporation papers, I'm not in my office but I'm almost positive I have a copy of the by-laws also.
No stock has been issued. I guess my question is, do I need to keep them on the board - they'll never show up for meetings and will never respond to anything. ...

How can you get rid of them? Call a board meeting for the purpose of voting them out of their offices and positions on the board? And hope they don't show up? One problem with that scenario is that you might not have the requisite quorum on the board.

Without having issued stock, the corporation is merely a shell. If you want to go ahead with this corporation you had best buy some stock in it.

Originally Posted by dennis321

As for the profit corp - I sent her acct. a letter today stating I'm ok with the dissolution. My accountant and I will apply for a DBA soon to "re-instate" the company.

"As for the profit corp."? -- isn't that what the previous paragraph was about?

So you are saying that you will re-incorporate w/o the two troublemakers?

dennis321 · Mar 31, 2010, 08:25 AM

Fr Chuck and AK-

Thank you for the responses. I guess my main concern about the non-profit is really this: as it is in the throes of the filing process, 1) can "they" do anything to un-do the process prior to it being finalized; and 2) if it does go through and is accepted, does it "theoretically" always exist, no matter what happens to the principals, board members, etc. (I will keep 3 people on the board - not them!

As far as the profit co. -hell no! Why would I want these "people" back with me?! What I meant was, I would take this dissolved company and make it a DBA of my own company (a company I own on my own, has nothing to do with them). I do not wish to re-incorporate this. The DBA will suffice.

AK lawyer · Mar 31, 2010, 09:17 AM

Originally Posted by dennis321

I have the corporation papers, I'm not in my office but I'm almost positive I have a copy of the by-laws also.
No stock has been issued. I guess my question is, do I need to keep them on the board - they'll never show up for meetings and will never respond to anything. (just a thought...anything I could do to make it "uncomfortable" for them?). Sorry, but they've just put me through hell.

So I now believe I understand that this pertains to the non-profit. That was what confused me. And, with that said, it of course follows that no stock has been, or will ever be, issued.

The by-laws, or if by-laws don't exist or address the point, non-profit corporation statute, will specify how to remove board members.

Originally Posted by dennis321

... as it is in the throes of the filing process, 1) can "they" do anything to un-do the process prior to it being finalized; and 2) if it does go through and is accepted, does it "theoretically" always exist, no matter what happens to the principals, board members, etc. (I will keep 3 people on the board - not them!
...

1) Here you are referring to the pending I.R.S. 501 (c) determination. Sure, anything is possible. If they deliberately set out to de-rail the process I'm sure they could find some way to do it. Once you have changed the board makeup and replaced them as officers, it would be a good idea to contact the I.R.S. with proof of this change and let it know that from now on you are the only authorized contact person regarding the 501(c) application.
2) Yes, the non-profit corp. always exists unless dissolved (for non-payment of state-required fees, non-filing of annual reports, etc. would be the most usual way this would happen). But yes, it continues to exist despite a change in board membership.

dennis321 · Mar 31, 2010, 09:49 AM

Thanks. Pending I don't ever get any info out of them - could you recommend a starting point for me to call to find out the status of the filing?

(P.S. I have the by-laws. I am the President; ex-partner is the Secretary, and her husband is the Treasurer. It's just the 3 of us. Could they both gang up on me and vote me out or make decisions regarding the future of this organization without my permission or approval?

AK lawyer · Mar 31, 2010, 11:55 AM

Originally Posted by dennis321

Thanks. Pending I don't ever get any info out of them - could you recommend a starting point for me to call to find out the status of the filing?

No idea. Sorry. But it's just a matter of Googling IRS (You might start here.), making a few calls.

Originally Posted by dennis321

(P.S. I have the by-laws. I am the President; ex-partner is the Secretary, and her husband is the Treasurer. It's just the 3 of us. Could they both gang up on me and vote me out or make decisions regarding the future of this organization without my permission or approval?

No. Unless the by-laws provide otherwise, officers don't vote ex officio. It would be the directors that fire the officers. Do that ASAP, because the secretary could fake a meeting (special meetings require notice, but she could conceivably fake that), and do some mischief.

dennis321 · Mar 31, 2010, 11:58 AM

Thanks!