Hypothetical situation: A private business buys itself from its owner, what happens?
Question by Star F: Hypothetical situation: A private business buys itself from its owner, what happens?
Let’s say there’s business A. The owner of the business A has his personal finances seperate from the business. There is no board of mangers, nothing of the sort. The owner realizes his work in the job is superflous and gets rid of all management positions, and as his last act as owner, has the company buy itself from him, and then steps down from any role. What is the status of the company?
(Note: Some may wonder how a company could exist without management. We’ll go with this hypothetical situation within the hypothetical situaiton…
The business is a website that makes movies by popular design. All funds go into a paypal account on the website, and expenses are automatically deducted by the business software and processes. As far as the movies made, directors submit scripts, and fans visiting the site vote on their favorite one. The winning director is awarded 50% of the sites advertising revenue for the month to get their movie started. Almost the entire process is automated, possibly no employees at all, just a self-perpetuating business without employees, management, etc.
What would be the legal status of the business? Is there anything that covers a situation like that?
Okay, extending the hypothetical situation a little…
The net-business was once incorporated, but all the shares owned by only 3 people. All 3 realize the business can run itself as a website program, were generally bored with it but didn’t want to end it, and agree to have the business buy the shares from them all one day as one single contract and they walk away.
Best answer:
Answer by Jo W
Not in your fantasy world where a company seems to have neither shareholders nor directors. If the business isn’t incorporated, it has no separate legal existence from the owner, so the argument founders immediately.
Add your own answer in the comments!
