Farm Business

[Faust100F]

Most articles of Incorporation or bylaws will contain a right of first refusal to other shareholders.  What you might want to suggest is that the corporation repurchase your stock for treasury, that way your other shareholder ends up 100% shareholder, there will be other tax attributes associated with the sale of stock, i.e. basis in stock, etc.  but your tax preperar can perform that calculation.  The best part of selling your stock may be the capital gains treatment you receive from its sale. 

Since a Sub S is restricted to one class of stock usually common voting shares,  it can also be issued in voting and non voting shares. I assume you hold voting shares.  If you have offered your shares, to the remaining shareholder, and then the corporation, I think you can sell your stock to anyone,  

You mention that both you and your fellow shareholder must sign the stock to sell it.  I don't think that will stand up, because if you are in fact the sole owner of your shares,   and you have followed the by-laws regarding right of first refusal, then you can sell it

and request the corporation to correct the records of shareholders in the Corp.

You will have an expense associated with the appraisal of assets in the corporation to determine the value of your shares, but you will need that for the court so it can address the value of the stock in its opinion.  That will also serve as a defense before th IRS if they should in fact question your valuation of the stock sold.

Depending on the date of sale, the profit or loss at year end will be allocated to you based upon the period you held the stock before sale.   If your fellow shareholder gives you flak, I am sure a District Court would render a decision in your favor regarding the right to sell your stock.  Good Luck. John

P.S. if you have a Sub S Shareholder who is difficult to deal with, and you no longer want to pick up income you are not receiving benefit from, you can violate one of the rules which would terminate the election and have it revert to a C corporation and it would be required to pay its own tax and shift the burden of tax to the corp instead of to you.  Just sayin . . . John