A corporation was created three years ago. I am the majority investor and there is another minority investor. We have a manager who runs the location for us who seems to be skimming pretty much everything of the top. Unfortunately, I did not do my due diligence when starting on this investment and have only recently had time to sort through the mess that has been created.
Apparently, a form was filed with NY state at inception and a certificate of incorporation exists. I have not been able to get any of the paperwork from the manager and had to request that this certificate be mailed to me from New York state.
On the certificate of incorporation form i received, the manager is lsited as the incorporater. On this form no where, is my name or the minority investor's name listed. After speaking with the manager, it seems that no further articles or anything were filed. Over the last two years there has been no profit, only loss and no income taxes have been filed. We have paid sales taxes.
What needs to be done to clean up the situation? As of now am I even the legal owner of the corporation given that my and the minority investor's names are not on the certificate but I invested over 100k into this business.
Any help advice you may have would be great. Feel free to email me directly at sales@yourcapandgown.com
I agree, thats why dealing in the business world as a detached investor is risky. Especially if you are more hands off, and you are trusting people. When i Invest in companies, I make sure there is contracts signed, with witnesses and everything is known, i am a pessimest and expect the worst in people, so i try and cover myself.
Have you resolved anything regarding this in the meantime? Please update the thread when you find out more, or contact a lawyer. I am interested in finding out the resoultion.
Once you get the documents from the State - there should be a section that outlines your authority to change management.
Also, are there any financials or audited financials that you can review? If audited financials - talk to the CPA to see if you can find specifics.
Well, this is a sticky situation and I'd suggest you hire an attorney who handles disolutions and creations of corporations. I'd assume you could ammend the current corporation, however I'm not to sure if you can do exactly what needs to be done. My advice is if you're in 100k+ for an investment an attorney is the best way to go and make sure everything is done properly this time.
Since I cannot give advice because you're in New York, initially it MIGHT be good news that you're not listed. So you may only lose your investment and you MIGHT not be on the hook for the other debts. That being said, I strongly recommend you seek a business attorney in New York who has specific experience in these matters. And now's the time to start getting all your paperwork together and be prepared to show your attorney everything you've got. Good luck!
GoodFTA | Contributor | 6/16/2009 - 4:31 am
phanio | Contributor | 6/16/2009 - 5:44 am
BuzGuy | Contributor | 5/11/2009 - 11:35 am
sbbarca | Contributor | 6/15/2009 - 12:01 am
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