How can we take shares from a shareholder in our company for failure to pay taxes the shares?
The rights of shareholders depend largely on provisions in a corporation's charter and by-laws. A corporation must have bylaws, although states generally do not require that corporations file the bylaws with the secretary of state. Bylaws are rules that dictate how
the corporation is going to be run, including rules regarding the conduct of corporate officers, directors, and shareholders. Corporations need to follow certain corporate formalities such as updating their corporate records, including bylaws, which are fairly easy to amend.
A corporation’s board of directors elected by the shareholders have a fiduciary duty to act in the best interests of the corporation. A director who breaches this fiduciary duty may be sued by the shareholders and held personally liable for damages to the corporation. Directors may discuss issues affecting and make decisions about the corporation at regularly held or specially called board meetings as allowed in the bylaws. There must be a quorum present at the meeting
before the board can make a decision affecting the corporation.
When a corporation engages in wrongdoing, such as failure to correctly pay taxes, the people behind the corporation generally are protected from liability because the corporation is a legal identity of its own and is liable for its acts. However, courts may in some cases ignore the
separate corporate identity and render the shareholders, officers, or directors personally liable for acts they have taken on the corporation's behalf. Courts will do this if a shareholder, officer, or director has engaged in fraud, illegality, or misrepresentation.