In an s-corp with 3 partners do you need a majority vote or unanimous vote to pay a partner a salary?

Question

In an s-corp with 3 partners do you need a majority vote or unanimous vote to pay a partner a salary?

Answer

It would depend on the language in the bylaws or shareholders agreement. If there are no such documents, then the answer is majority. However, for such a small corporation, you may want a unanimous vote otherwise the minority shareholder may seek dissolution for being squeezed out of the decision making process.

Mike.

Answer

If there are no governing provisions in the certificate of incorporation or bylaws, then the salary paid to an officer must be approved by the Directors and the salary paid to non-officers is at the discretion of the president or the officers of the Corporation.

Answer

As a Franchise Attorney I somewhat agree with the other attorney answers. But, first of all, a corporation has shareholders, not partners. Second, the CEO usually has authority to hire and fire, and that includes salary decisions. Third, the results, etc. can be modified by governing corporate documents, so everything needs to be reviewed and considered. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation