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What Are My Rights as a Minority Shareholder?

In small, closely held companies, especially start ups, you may be both a shareholder and an employee of the company.  Though your employment status is "at will" under Massachusetts law, your fellow shareholders also owe you a fiduciary duty.

If you are terminated from your employment without a legitimate reason, you may have a claim for breach of fiduciary duty, or a "freeze-out."  The basic idea is that if your employment is part of the benefit you received as a shareholder, and if your partners force you out without a good business reason, they may have breached their fiduciary duty to you.

How strong your claim is will depend on the facts- it will also depend on the written agreements between you and your partners.  Under Massachusetts law, if you agree in writing to certain things, such as a right by the majority to terminate your employment, a court may not find that such a termination was a breach of fiduciary duty.  However, these cases are very fact-specific.

​If you believe you are being unfairly pushed out of a closely held company where you also have an ownership interest, it is important to consult an employment lawyer as soon as possible to get clarity on your rights.


Learn more here about shareholder freeze-outs in Massachusetts.

Need Help With a Shareholder Dispute?

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Employment Termination Attorney MA slnlaw

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Copyright 2022, slnlaw
  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Employment Contracts in Massachusetts
    • Discrimination in the Workplace
    • Employment Termination >
      • Massachusetts Paid Family Leave
      • Severance Pay
      • Unemployment in Massachusetts
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws
    • Independent Contractor Law
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection
    • Why You Need an Estate Plan
    • Why You Don't Have an Estate Plan
    • Estate Planning Documents >
      • Children with Special Needs
    • Planning for Assisted Living
    • Probate Process
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Sharleen Tinnin
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs
  • Blog