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Drag-Along Rights and Tag-Along Rights

When starting any type of business with multiple owners (whether it be a limited liability company, corporation, partnership, etc.) it is important to include provisions relating to the sale of the business to a third-party purchaser. These types of provisions are especially important if the owners ultimately intend to sell the business to someone else. […]

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Corporate Provisional Directors

Corporate litigation and disputes can often lead to unintended consequences. Section 351.323, RSMo discusses a scenario in which the court may appoint a third-party provisional director of a corporation when there is an (a) even number of directors who are equally divided so that business can no longer be conducted and/or (b) when there is […]

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Corporate Derivative Lawsuits, Settlement

A derivative action refers to a type of business/corporate lawsuit. They are equitable actions which “place in the hands of the individual shareholder a means to protect the interests of the corporation from the malfeasance of faithless directors and managers.” Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 95 (1991). In essence, it is a […]

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Personal Liability for Corporate Officers and Directors

One of the traditional benefits of a corporation is that it generally shields its shareholders, directors and officers from the liabilities of the corporation. Indeed, merely holding a corporate officer in Missouri does not subject one to personal liability for the misdeeds of the corporation. Grothe v. Helterbrand, 946 S.W.2d 301, 304 (Mo. Ct. App. 1997). […]

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Foreclosure and Sale of Membership/Ownership in a LLC

After a recent appellate court decision, it is clear that there are more liability protections for owners/members of a limited liability company (“LLC”). The “new” protection is indirect. Generally, the owners of a LLC are shielded form the debts and liabilities of a LLC. If, however, an individual has a personal judgment against him/her (even one completely […]

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Ordinary Shareholder Relief: Removal of Corporate Directors & Officers

Although priority will generally be given to a corporation’s bylaws and shareholder vote, Missouri law has several safeguards that protect minority shareholders in closely held corporations. To give examples, if a shareholder can prove that the (1) directors or those in control of the corporation have acted, are acting, or will act illegally, oppressively, fraudulently […]

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Corporate Disposition of Assets: sale, lease, exchange

While the directors and officers of a corporation typically run its day-to-day operations, the shareholders — the owners — are generally responsible for their election and the direction of the corporation. It should come as no surprise, therefore, that major decisions involving the corporation often require shareholder approval. This extends to include when the corporation […]

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