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If you own a minority share of a class C corporation, am I entitled to withdraw funds from the corp during a divorce?

Question Details:I am planning to divorce and I am not sure of my available resources. Can I withdraw money from our class C corp even though I am only a 49% partner in the company? He retains 51%. Will he be able to use funds from the corp?

Asked 2 years ago under Divorce, Marriage, Alimony | 1148 Views | More Legal Topics

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M.M., Member, New York and Illinois Bar | FreeAdvice Contributing Attorney Answered 2 years ago

It may not be nice, but all's fair in love and war. If the organizational documents of the corporation entitle you to withdraw funds, then you are within your rights to do so, but it is unlikely that the organizational documents of the corporation (typically the articles of incorporation and by-laws) entitle you, your husband, or anyone else associate with the corporation to use the corporation's money in a way that does not benefit the corporation. What you need to pay close attention to is anything in the organizational documents that covers whether and under what circumstances (and with whose permission) an owner of the corporation may take a distribution of money from the corporation. Typically that would require a vote of some kind, but you never know until you actually look. It's all about what the documents say. You can't just pull money out of the corporation unless you do so in a manner that is authorized by the organizational documents, but then neither can your husband.

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