• Shareholder Disputes in closely held corporations are common and often arise from voting deadlocks, financial disagreements, and claims of minority shareholder oppression.
• New York law provides several legal remedies, including dissolution proceedings, buyouts, and derivative lawsuits.
• Preventative measures, such as well-drafted shareholder agreements, can mitigate future disputes.

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Key Takeaways: When to Seek Judicial Dissolution of an LLC

• What is Judicial Dissolution? A court-ordered termination of an LLC when voluntary dissolution is not an option.
• When Should You Seek It?
  • Deadlock among members preventing essential business decisions.
  • Conflicts that make business operations impossible.
  • Fraud, oppression, or misconduct by controlling members.
  • The LLC can

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• Advances or capital contributions made to a limited liability company without authorization may be a source of conflict.
• Using unauthorized advances or capital contributions as a means to exert control may be a breach of fiduciary duty.
• A well-drawn operating agreement addresses how and when the owners put additional money into a limited liability company.

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• Shareholder disputes in a closely held business threaten the business and personal financial interests of the owner.
• New Jersey law provides the owners of a closely held corporation with rights and remedies that assure access to information and the financial benefits of ownership.
• Closely held corporations can use effective planning and negotiated solutions to avoid

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Transfers of business interests routinely seek to benefit from the discounts that accompany lack or control and marketability. Reducing the assets in an estate obviously reduces estate tax liability and the application of discounts in the transfer made during one’s life can result in significant tax savings.
The IRS, however, often challenges these “inter vivos”…

• Effective strategic planning for the closely held business owner should begin with a formal valuation.
• The information gathered and considered in a business appraisal provides insights into the business overlooked in day-to-day operations.
• Valuation studies provide an insight into the potential value of the business and roadmap to to becoming a ‘best in class’ enterprise.

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• Intangible assets are typically the most valuable possession of a closely held business, but often are poorly protected.
• Risk mitigation through a business bulletproofing process can protect those assets from being misappropriated.
• Intangible assets include customer relationships and intellectual property.

I sometimes ask closely held business owners if they lock the doors to their business…