My question involves business law in the state of: California
I invested in a startup business with five other shareholders. One shareholder resigned. The shareholders agreement should have been revised immediately after this to reflect that this shareholder (who was also on the board of directors) was no longer a shareholder, as well as a couple of other changes that were voted on and agreed to in shareholders meetings. The original shareholders agreement has not been revised and now another shareholder is suing the corporation in the hopes of getting their original investment back. I am not on the board of directors and I'm not an employee. The company isn't making any money and will likely have to file bankruptcy if the new lawsuit ends up going to court. My questions are:
1) If the shareholder's agreement was never revised, is the original shareholders agreement considered to still be in effect or are we considered to have no shareholders agreement since the original agreement is not accurate (due to voted on changes and a shareholder leaving). The original agreement says that all shareholders must make their best efforts to financially support the company.
2) As a shareholder, what are my financial obligations to a company that has no money but is being sued for a significant amount of money?
The company does have a corporate attorney, but I'm seeking advice for myself, not the corporation. I apologize if the answers are obvious, but business law is not my area of expertise.
Thank you in advance for any advice that you can give.
I invested in a startup business with five other shareholders. One shareholder resigned. The shareholders agreement should have been revised immediately after this to reflect that this shareholder (who was also on the board of directors) was no longer a shareholder, as well as a couple of other changes that were voted on and agreed to in shareholders meetings. The original shareholders agreement has not been revised and now another shareholder is suing the corporation in the hopes of getting their original investment back. I am not on the board of directors and I'm not an employee. The company isn't making any money and will likely have to file bankruptcy if the new lawsuit ends up going to court. My questions are:
1) If the shareholder's agreement was never revised, is the original shareholders agreement considered to still be in effect or are we considered to have no shareholders agreement since the original agreement is not accurate (due to voted on changes and a shareholder leaving). The original agreement says that all shareholders must make their best efforts to financially support the company.
2) As a shareholder, what are my financial obligations to a company that has no money but is being sued for a significant amount of money?
The company does have a corporate attorney, but I'm seeking advice for myself, not the corporation. I apologize if the answers are obvious, but business law is not my area of expertise.
Thank you in advance for any advice that you can give.
Business Disputes: Shareholder Financial Obligation
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