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Joseph M. Campos

Joseph Campos’s Answers

6 total

  • My partner just resigned as director, and is calling in what he calls a loan, the problem is the money was apart of the original

    investment and not a loan. The original investment for shares has not been paid to the company in full but this partner does have 50% shares. There are no loan documents. I do not have the money to pay this, and the bank account was drained by th...

    Joseph’s Answer

    First, you should definitely consult with experienced corporate counsel. There may be provisions in the organizational documents of the corporation, including written stock subscription agreements, that may be important in analyzing the situation and determining the proper course of action. If what the former director calls a loan is really a partial payment on a subscription for 50% of the corporation's shares, the corporation may have a claim against the former director to enforce the subscription agreement. A stock subscription agreement entered into after incorporation is a contract between the subscriber and the corporation. If a subscriber defaults on a stock subscription agreement, Washington law expressly allows a corporation to enforce the contract and collect the amount owed in the same way it would enforce any other debt obligation.

    Clearly, there are other points of disagreement between you and your business partner. If your business partner "drained" the corporation's bank account by distributing money to himself/herself, you and the corporation may have other claims against the former director. It would be wise for you to consider hiring experienced counsel right away.

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  • Selling minority shares in s-corp shares

    I have some shares (minority shares)in an s corp through employment. After I have moved on to another company I found out that the s corp is not distributing any of its income and the owner of the company has signficantly diluted my shares in the ...

    Joseph’s Answer

    As a shareholder in a Subchapter S Corporation, it is possible you are a party to a Shareholders' Agreement or a Buy/Sell Agreement that restricts transfers of your shares. If you are a party to such an agreement, it may require you to first offer the shares to the company and/or the other shareholders, and may also provide that you have a contractual right to cause the company to buy or redeem your shares, though the latter is not a common or standard provision. If you do have a right to require the company to repurchase your shares, it would be subject to applicable state laws governing distributions to shareholders. In particular, a company that is insolvent generally cannot repurchase shares as doing so would constitute and unlawful distribution to the selling shareholder.

    In addition, your shares are likely "restricted securities" and will require you to comply with state and federal securities laws regarding resales of restricted securities.

    Donating the shares to charity may be possible, but the transfer would again need to comply with any Shareholders' Agreement or Buy/Sell Agreement that may exist, as well as securities laws regarding restricted securities.

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  • Employer requesting employees sign a non compete agreement, under WA law is this required

    After 30 years with my company in a managemnet position, my company wants everyone to sign a non-compete. I only have a few more years left before retirement and wanted to possible do some part time work in the business after I leave. How can I n...

    Joseph’s Answer

    The general rule in Washington is that if you are already employed and your employer wants you to sign a non-competition agreement, the employer must give you some sort of additional consideration (e.g. a raise, a bonus, a promotion, etc.). Without additional consideration, such a non-competition is likely unenforceable. Continued at-will employment is insufficient consideration. The Washington Supreme Court most recently reviewed this question in a 2004 decision, Labriola v. Pollard. See, http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=wa&vol=2004_sc/740020co1&invol=3

    Whether the non-competition agreement your employer wants you to sign will be enforceable will depend on the consideration issue as well as on the specifics of your employment situation. You should definitely consult your lawyer before signing such an agreement.

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  • Gift card expiration

    Are expiration dates on gift cards legal in Washington ?

    Joseph’s Answer

    No, except in a few instances. In 2004, legislation was enacted in Washington prohibiting expiration dates or any service,dormancy or inactivity fees on gift certificates. The are some exceptions to this law for non-profit corporations, financial institutions and artistic and cultural organizations. The 2004 law also changed the responsibilities of Washington gift certificate issuers with respect to abandoned gift certificates. Prior to the new law, the value of abandoned gift certificates had to be turned over to the State as unclaimed property. Now, Washington gift certificate issuers are not required to honor abandoned gift certificates. Washington's Uniform Unclaimed Property Act defines when gift certificates are deemed abandoned.

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  • Claiming to be LLC business

    A business that claims to be a Limited Liability Company in their contracts/agreements, and advertisements. However after researching the Secretary of States office, they lost their certificate of organization, etc. My question is... Is this no...

    Joseph’s Answer

    After a cursory review of the Texas Deceptive Practices Act, it does define "false, misleading, or deceptive acts or practices" as including the use "of the term "corporation," "incorporated," or an abbreviation of either of those terms in the name of a business entity that is not incorporated under the laws of this state or another jurisdiction." It seems logical that this provision should extend to the use of the words LLC in connection with a business that is not properly formed or registered as an LLC. Again, it would be helpful for a Texas attorney to weigh in on this issue.

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  • Claiming to be LLC business

    A business that claims to be a Limited Liability Company in their contracts/agreements, and advertisements. However after researching the Secretary of States office, they lost their certificate of organization, etc. My question is... Is this no...

    Joseph’s Answer

    The correct answer to your question is likely governed by Texas' limited liability company laws. You are not clear about why you gave this business $3,000. Did you purchase a product or service? If so, and absent any warranty, product liability or fraud issues associated with your purchase, you may not have any recourse. On the other hand, if you have a claim about the product or service you purchased you may still be able to file a lawsuit against the business, and the fact the business is not a properly licensed LLC may create some personal liability for those in control of the business. The State in which the company was purportedly registered may also impose fines or sanctions against companies doing business without a valid license. In some states, being unlicensed may also prevent the business from filing or defending a lawsuit, though that is a defect the courts may allow the business to cure. There are important facts missing from your question, so I recommend you consult with a Texas attorney in the state where the business was formed.

    Perhaps a Texas lawyer on Avvo can comment on the applicability of the Deceptive Trade Practice Act to the facts you've described.

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