What is the financial liability of a 50% owner who is also a secretary of a S type closed corporation in California? Can the other owner go to court for share of corporate expenses as this secretary with the 50% ownership is not willing to share the expenses already incurred. This secretary already claimed two K1 loses in previous two years and has not paid half of these loses yet. He also didn't pay the employee for which he already signed the labor certification.
The corporation only has articles of incorporation stating that both the partners are 50% share holders and no other bylaws.
-- Anonymous
A.
It appears that you have some fundamental misunderstandings about how corporations operate. Thus, I would suggest the first thing you do is to gather up all your paperwork and got see a local business attorney.
If you don't have bylaws, the California Corporations Code will generally govern your operational issues.
Claiming losses on a K-1 doesn't usually mean you have to contribute funds to the corporation to make up for the losses.
One could be a shareholder, a director or an officer (e.g., Secretary). Potential liability arising for acts or omissions could vary depending on which "hat" one is wearing at the time.
A company's failure to pay wages or payroll taxes may be grounds for imposing personal liability on directors or officers of the company.
