How a minority owner gets squeezed
In companies without a public market for their shares, a minority owner often depends on employment, a role in management, or regular distributions for any return. Common pressure points include termination from a company job, an end to dividends while insiders keep drawing salaries, issuing new shares that dilute the minority, and selling assets or opportunities to related parties. New York's Business Corporation Law allows holders of a large enough share of a non-public corporation to petition for dissolution based on oppressive conduct, and the company or other shareholders can often respond by electing to buy the petitioner's shares at fair value. Claims that harm the company itself are usually brought derivatively, on its behalf, while claims about your own rights are direct. LLC members in New York face a different and generally narrower dissolution standard, so the entity type matters early.
Records that support the position
Collect the certificate of incorporation or articles, bylaws or operating agreement, and any shareholder agreement, including buy-sell terms. Proof of your ownership, such as stock certificates, ledger entries, and tax forms reporting your share of income, is foundational. Keep the financial statements and tax returns you have received and note what has been withheld. Communications about your role, your compensation, and promises made when you invested are often important evidence of what everyone expected. Shareholders generally have rights to inspect certain books and records, and a formal written demand is often the first step in using them.
Planning the first moves
We begin by establishing what you own, under which agreements, and what your realistic goal is, whether that is a buyout, restored rights, or a change in how the company is run. Some disputes resolve through negotiation once the records are in front of both sides, while others require a books and records demand or a petition in court. Agreement clauses requiring arbitration or a valuation procedure may control the path. Valuation is often the real issue, and discounts or adjustments are frequently contested. We also consider what to keep doing in the meantime, such as continuing to attend meetings and avoiding steps that could breach your own obligations.
