what is a corporate umbrella?

Question

3 years ago before the owner of the company died he gave me 5% of the company.now 3 years later the owners children say that it is under the corporate umbrella.I want to know is that just away to say if I leave and want my 5% I wont get it but if I sue the corporate umbrella will cover the companies losses.

Answer 1

There may be something in the corporate charter that does not allow stockholders to demand a buy-out. With many small companies, even a 5% pay-out could strap the company. I am not sure what the "Corporate Umbrella" is referring to except the charter or some other type of ownership agreement.

Are you looking to leave the company? If so, talk with the management/family about a long-term buy out of 3-5 years. It would be far less harmful to the company.

If you are staying, you should be getting 5% of the corporate profit (as well as 5% of the corporate debt) on top of your normal wages/bonuses.

Get copies of everything they will give you and review them with an attorney that specializes in corporate dealings. It will probably cost you $200-500 but if you can't get satisfaction from the family, it may be your only choice.

Good Luck!