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  1. #1
    Join Date
    Feb 2020
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    Question Business Owner Wants Me to Close Business As Ceo

    My question involves business law in the state of: California

    Long story short:
    An investor's assistant approached me, a medical licensed provider, to open an outpatient clinic. I agreed and became the CEO but held no shares. The business was managed poorly and the assistant was fired and the investor stepped in with other investors. During this time, a lot of shady things were going on and I quit. They wouldn't remove my name from the business so it was a messy process, but it was finally (somewhat) done.

    The problem is, the investors aren't allowed to close the business as they don't have a medical license, which indicates they had been running the business, in some form, without a medical provider. So they had been threatening me (with other things) and want me to sign a document agreeing that I'll close the business at the end of the year. I don't want to do this because 1) I have NO idea what they had been doing since I left. 2) I don't want to become associated with them again and what they have/are doing, which is the reason why I left. 3) I don't know why they're asking me to do it at the end of the year (initially they told me maybe around May. I'm suspecting they took some kind of business loan with the Covid 19 small business protection...).

    I don't know what my obligations or rights are regarding their demand. I never agreed to close it, as they claimed. They continue to threaten me that they didn't report me to the boards, or can take me to small court claims (regarding something else), even though they told me they won't be anymore. If I ignore their request, what happens? Are they allowed to close the business themselves? Do they get "caught" and punished? I feel I am risking more to sign it, but don't know how to respond.

    Thank you for any help and insight.

  2. #2
    Join Date
    Jul 2018
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    2,336

    Default Re: Business Owner Wants Me to Close Business As Ceo

    Quote Quoting healthhelp
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    They wouldn't remove my name from the business so it was a messy process, but it was finally (somewhat) done.
    I'm guessing this means that, when you resigned as CEO, the others involved with the business did not file a Statement of Information with the CA Secretary of State that indicated your resignation. Correct? Did you put your resignation in writing? Did you send a copy of your resignation to the Secretary of State?


    Quote Quoting healthhelp
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    The problem is, the investors aren't allowed to close the business as they don't have a medical license, which indicates they had been running the business, in some form, without a medical provider.
    What do you mean by "close the business," and what law do you think would be violated?


    Quote Quoting healthhelp
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    I don't know what my obligations or rights are regarding their demand.
    You certainly have the right to say "no" to the demand. Whether you have any legal obligation to do anything can't be determined from your post.


    Quote Quoting healthhelp
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    If I ignore their request, what happens?
    No one here has any way of predicting the future in this regard.


    Quote Quoting healthhelp
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    Are they allowed to close the business themselves?
    In the prior paragraph of your post, you wrote, "the investors aren't allowed to close the business," so I find it extremely odd that you're now asking this question. If you're asking the question because you don't know the answer, then why did you make the unequivocal statement in the prior paragraph?


    Quote Quoting healthhelp
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    Do they get "caught" and punished?
    Caught by whom? Punished for what?


    Quote Quoting healthhelp
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    I feel I am risking more to sign it, but don't know how to respond.
    I'm not really sure what your concern is, but it wouldn't be the worst idea to consult with a local attorney and paying the attorney to write a response to whatever you received.

  3. #3
    Join Date
    Sep 2010
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    Default Re: Business Owner Wants Me to Close Business As Ceo

    Not much different than when you brought this up months ago: https://www.expertlaw.com/forums/sea...archid=3885674

  4. #4
    Join Date
    Feb 2020
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    11

    Default Re: Business Owner Wants Me to Close Business As Ceo

    Quote Quoting pg1067
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    I'm guessing this means that, when you resigned as CEO, the others involved with the business did not file a Statement of Information with the CA Secretary of State that indicated your resignation. Correct? Did you put your resignation in writing? Did you send a copy of your resignation to the Secretary of State?
    They didn't file a Statement of Information with the CA SOS so I had to do it. I did put the resignation of writing and sent it to them. I'm assuming they either want me to close it, or become CEO again, and then resign. Whatever will clean it up so they look like they did it properly.

    Quote Quoting pg1067
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    What do you mean by "close the business," and what law do you think would be violated?
    After I resigned and removed myself as CEO, they kept the business open under CA SoS. They want to close the business through the state, but they're saying they need me to do it since I opened it and I have the medical license. I'm guessing that if they close it themselves, they'll get in some kind of trouble of having a medical business with no licensed provider as the owner or CEO. I don't know what position this puts me in as realistically, I should have closed the business when I left, but they wouldn't let me, so I did what I could to get out.

    Quote Quoting pg1067
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    In the prior paragraph of your post, you wrote, "the investors aren't allowed to close the business," so I find it extremely odd that you're now asking this question. If you're asking the question because you don't know the answer, then why did you make the unequivocal statement in the prior paragraph?
    Sorry for the confusion. I'm assuming they're not technically allowed to close the business, as they're not allowed to open/start the business as they don't have a medical license. I'm guessing they can, but I don't know if they will get caught/punished by....the IRS? The health insurance companies who paid out the claims? CA SoS?


    Quote Quoting pg1067
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    I'm not really sure what your concern is, but it wouldn't be the worst idea to consult with a local attorney and paying the attorney to write a response to whatever you received.
    This just has been an ongoing issue. I did consult with 2 attorneys and found out what I did/didn't have to do, despite their threats. It just seems like they keep coming up with new things for me to do for them. They're not in a state to hire an attorney, so I know they're trying not to spend any money, but just trying to scare me into doing whatever they want. I'm just asking to see what suggestions I can find before reaching out to the attorney again so I have my questions in order and a better understanding. Thank you!

    It's quite similar...but this time, I did close everything that an attorney recommended I do. What's left now, is to completely close the business through CA Secretary of State, but they didn't let me do it, nor the bank account, and now they want me to do it at the end of the year. The attorney didn't mention for me to do this. I'm taking this as it's not my responsibility or problem...but again, not entirely sure.

  5. #5
    Join Date
    Oct 2016
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    Default Re: Business Owner Wants Me to Close Business As Ceo

    Quote Quoting healthhelp
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    Sorry for the confusion. I'm assuming they're not technically allowed to close the business, as they're not allowed to open/start the business as they don't have a medical license. I'm guessing they can, but I don't know if they will get caught/punished by....the IRS? The health insurance companies who paid out the claims? CA SoS?
    I don't see why you would need to do anything other than notifying everyone that has a dog in this fight that you and your medical license is no longer there. The law may not allow them to operate a business without a licensed medical professional but it shouldn't stop them from closing it. What if you had gotten hit by a truck instead of quitting.

  6. #6
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    Jul 2018
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    Default Re: Business Owner Wants Me to Close Business As Ceo

    Quote Quoting healthhelp
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    I'm assuming they either want me to close it, or become CEO again, and then resign. . . . They want to close the business through the state, but they're saying they need me to do it since I opened it and I have the medical license. I'm guessing that if they close it themselves, they'll get in some kind of trouble of having a medical business with no licensed provider as the owner or CEO.
    It sounds like you don't really know what these folks want, so it's hard for us to tell you too much. Since you are not, and apparently never were, a shareholder, and since you have resigned your position as CEO, there's nothing much you can do. What sort of "medical provider" are you? Knowing that might allow for an educated response as to whether it might be in your best interests to get involved again. It might also help explain why the shareholders want you to whatever it is that they want done.


    Quote Quoting healthhelp
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    I did consult with 2 attorneys and found out what I did/didn't have to do, despite their threats.
    No anonymous stranger on the internet will be able to give you better information than an attorney who knows all of the relevant facts.

  7. #7
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    Feb 2020
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    Default Re: Business Owner Wants Me to Close Business As Ceo

    I searched and asked around some more and have re-assessed my situation and now know I am not obligated to comply to their demands.

    Is there a protocol or "right way" to respond to their demands/requests? I want there to be a paper trail, and I'm not sure if just replying to their email would suffice. Someone suggested I write all the facts out that have happened so far and why I shouldn't and I'm not obligated to comply to their demand, get it notarized, and send it certified mail. Is this recommended or is there a better way? Or would just replying to the email would be ok?

  8. #8
    Join Date
    Jan 2011
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    347

    Default Re: Business Owner Wants Me to Close Business As Ceo

    Email sent is not necessarily email received. If their only method of contacting you has been via email, no phone calls, no texts, no letters, no certified/return receipt letters, then I would simply ignore the emails and go on with my life. Their problems are not your problems. I would not make their problems my problems by going back to work for them.

  9. #9
    Join Date
    Feb 2020
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    11

    Default Re: Business Owner Wants Me to Close Business As Ceo

    They did leave a message on my phone once, and an attorney, who had been doing them a favor, had initiated contact through email a few times, but now they want me to correspond with them directly. They have been making claims that they can report me and have been making threats, so I feel compelled to make the record straight and that I don't need to do anything.

  10. #10
    Join Date
    Oct 2006
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    Default Re: Business Owner Wants Me to Close Business As Ceo

    Quote Quoting healthhelp
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    They did leave a message on my phone once, and an attorney, who had been doing them a favor, had initiated contact through email a few times, but now they want me to correspond with them directly. They have been making claims that they can report me and have been making threats, so I feel compelled to make the record straight and that I don't need to do anything.
    Its better just to ignore then entirely rather than possibly risking saying the wrong thing.

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