It’s not uncommon for entrepreneurs to invest their time, energy, skill, and capital into an established corporation’s or company’s business with the understanding that, upon investing into the business, they will become owners of the business entity. When this happens, the business entity may not provide the investor with stock or membership certificates evidencing his or its ownership, and may later claim that the investor is not an owner entitled to distributions or anything else related to ownership in an interest, but rather merely an employee. Does such an investor have any recourse to reclaim his or its interest in the company or corporation? In Florida, the answer is: Yes.
In Acoustic Innovations, Inc. v. Schafer, 976 So. 2d 1139 (Fla. 4th DCA 2008), the Fourth District Court of Appeal affirmed a trial court’s decision to dissolve a corporation upon a former employee’s request, and to award the former employee 50% of the value of shares in the corporation upon dissolution, where the corporation’s owners promised to make the former employee a 50% owner, but failed to transfer shares to the former employee in accordance with the promise. Specifically, the Court found that, because of his contributions to the company (coupled with the current owners’ prior promise to transfer shares to the former employee), the former employee was the holder of an equitable or beneficial interest in 50% of shares of the corporation with standing to bring a direct action for the immediate dissolution of the corporation. The Schafer case is binding on trial courts in Broward and Palm Beach counties seeking to determine whether an “owner” without stock or membership certificates is an owner in fact.
If you’ve contributed to a business under the pretense that you’d be made an owner, then you likely have a claim that you’re an owner, even if the corporation or company never issued you certificates evidencing your ownership interest in the business entity. In that case, call a Fort Lauderdale business litigation lawyer to evaluate your case. The Fort Lauderdale business lawyers at The Carlin Law Firm, PLLC are here to help. To schedule a consultation, call (954) 440-0901 or complete the contact information form appearing at the bottom right of this page.