There are a number of powerful tools that can be used to protect a business owner facing a business divorce. Business owners are protected by Business Corporation Law Section 1104(a). In fact, the law protects shareholders from oppression, fraud, corporate theft, illegal actions, etc.
Business Corporation Law protects both the rights of the complaining shareholder to liquidate the investment at fair market value and the right of the remaining shareholder to preserve an ongoing and prosperous business.
To avoid the potential drain and risk of a court proceeding, Business Corporation Law Section 1118(a) offers the remaining shareholders a potentially equally powerful response. Under this section, a business owner may elect to purchase shares at their fair value to resolve the business dispute. If the parties cannot agree on “fair value” then the Court will set it. Determining the value of your business will depend on the circumstances of the case.
To protect your interest and avert the personal and financial trauma of a lengthy court proceedings, business owners must proactively prepare for a business divorce.