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Starting a Business

What Are My Rights as an Investor?

min read
Opinions expressed by Entrepreneur contributors are their own.
You're right. Just because you are a minority shareholder doesn't mean you don't have rights to have a say in what goes on in the company.

First, look carefully at your shareholders agreement -- assuming you have one. It should have provisions that talk about the voting rights that apply to significant business decisions such as staffing changes, determining signatories to the company's bank accounts and other management issues.

As a majority shareholder, your partner may well have the right, and enough votes, to make these changes, but not without following the proper procedures in your shareholders agreement and the state's corporate law.

However, if you don't have a written agreement, you'll want to give careful thought to whether you want to stay involved in this business. Litigation is your next likely step, and the cost of that could outweigh the value of your ownership interest. You'd be well served to speak to a local business attorney to get guidance on the cost of litigation and possibly negotiating a buyout of your interest.

Related: What to Do When Your Partnership Sours
Related: Shareholder Resolution - Voluntarily Liquidate [Form]

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