Closed Corporation Question

[Tesla]

We have a cc with 3 members.
The membership contributions were made with a of split 50, 30 and 20 percent respectively on a small amount. There is no shareholders agreement in place.
Say the company now makes a million profit. Is each one now entitled to that amount according to their share? And what about the other way round, say the company is 1 million in debt? What is one's legal rights in this case? Curious.

 

[mikef]

The quick answer is that the profit belongs to the cc and not to the members. The members have no claim on the profit until a distribution is approved by the members at a meeting of the cc.

As regards the debt it would depend on various factors. To the extent that the debt is attributable to operations while the cc is insolvent each member could potentially be held jointly and severely liable for the full R1mil.