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Jane Doe Deer
Jane Doe Deer, Attorney
Category: Business Law
Satisfied Customers: 3864
Experience:  Atty since 1986. Real estate, tax, and other business law questions
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In April 2007 a friend and I started a business ...

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In April 2007 a "friend" and I started a business and orally agreed that he would own 60% and I would own 40%. We have both worked very hard and the company is doing well but my "partner" has a lot of problems and I want out. Problem: no written contract, assets/bank accounts in his name only, we were incorporated in NV (but have done all business in CA) about 6 months ago (he is only owner on corp docs) and he agreed that we would redo corp papers to indicate my 40% this month but I do not think he is going to do it. Is the contract enforceable?
Submitted: 6 years ago.
Category: Business Law
Expert:  Jane Doe Deer replied 6 years ago.

This is one of the those situations that you could argue either way.

You say you want "out." What does that mean to you? Does that mean that you get some money for your share of assets and income? Or do you just want to get free of any liabilities?

This is one of those situations where you really do need a local attorney to help you - someone with experiencing in dissolving partnerships. It's similar in many ways to getting divorced, but the attorney will need to arrange for an appraisal of the company's value (otherwise, how can you split things up accurately?)

I hope that responds to your question and you can "accept" it.

If not, please let me know where I haven't met your expectations and I'll try to respond.

Merry

Customer: replied 6 years ago.
Reply to Merry A. Kogut's Post: I really am not sure what I want to do. I am not worried about liability. I just want to know if I "own" 40% under the applicable laws absent a written agreement and if I can sue for breach, force him to put me on the corporate paperwork as 40% owner and/or get my share of the $$, assets and goodwill value of the company.

Thanks.

Mike Treger
Expert:  Jane Doe Deer replied 6 years ago.
You really want to do this to your friend? Have you tried mediation? Or maybe just the two of you having a beer with a mutual friend?
Customer: replied 6 years ago.
Reply to Merry A. Kogut's Post: He is "doing it" to me by threatening (behind my back) to empty our bank account (which has 50k+++) and keep it.

All I want to know is -- is the oral agreement enforceable and do I have a legal right to 40% of the company's assets, etc.

I will gladly pay if you answer my legal question (by the way, I am also an attorney licensed in WA but I am not an expert in this area of law and need to know how this will go down in CA)
Expert:  Jane Doe Deer replied 6 years ago.

I think that whenever or wherever one has an oral contract it becomes a very fact-driven decision for the judge. So I am going to sound like I'm giving you one of those "lawyer" answers, but when I look at this objectively it could go either way.

Put another way, I think you can make a very sound, viable argument that you own 40% of the company. You will want to support your position with as much evidence as possible, of course--even little things, like letterhead with both your names, could help support your case.

What I can't tell you - and no one can - is whether you're likely to win. It's so much easier with a written contract, because, generally, what you see in black in white is what you get.

If I've been of service, please "accept" this service. I'm going offline until tomorrow anyway.

Customer: replied 6 years ago.
Reply to Merry A. Kogut's Post: Two of the employees that have been working with us will testify in court that it is well known and he has stated on many occasions that I am a 40% owner. How useful would that be?
Expert:  Jane Doe Deer replied 6 years ago.

Very useful.

 

If my answer has been helpful to you, please click "ACCEPT" so that I may be paid. This is the only way that I will receive compensation for the work performed. Please consider clicking "BONUS" as a nice way of saying "thanks" for a job well done. Clicking "FEEDBACK" to leave your positive comments is always greatly appreciated.

The information provided is general in nature only and should not be construed as legal advice. By using this forum, you acknowledge that no attorney-client relationship has been created between you and Merry A. Kogut or Key Peninsula Law in Washington.

Jane Doe Deer, Attorney
Category: Business Law
Satisfied Customers: 3864
Experience: Atty since 1986. Real estate, tax, and other business law questions
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