CA state business laws, wind down of business, division of assets and debts

Santa Maria, CA Viewed 377 times. Posted about 1 year ago in Business

Business Break-up: We have started a business and have actually completed the incorporation (California) process with another 50% shareholder. This other individual agreed to bring in an amount of cash while I brought the product idea. The legal doc’s never outlined his cash contribution and I have since declined to sign a buy-sell agreement. This individual has already invested over 50% of the money (over a few month period)promised but has also begun to try and take over. Personal conflicts have taken place and it is clear that this relationship must end. This person has invested very little time to the product as far as intellectual property is concerned. Despite financial hardship, I would like to attempt to pay him back and keep the corp. (if possible). If he chooses to fight, I was wondering what kind of damages I can expect. - Is this your question? Add additional information

Answers (3)

Daniel Nathan Ballard

This attorney is licensed in California. Posted about 1 year ago.

This situation is, unfortunately, classic. One person brings to a business ideas, another brings cash, and then they bicker and decide they can't work together. In your case, you also have to deal with a third entity -- the corporation that you formed. It is no surprise that the one who brings cash to the table has the upper hand in such a dispute.

There is no short answer on to how to deal with this situation. It is very important that the corporation (i.e., the two of you) hire an attorney to represent the corporation to provide you both (as directors and shareholders) with advice about what NOT to do during this dispute. Very often one or both parties in these divorces take actions that further complicate the matter -- which then dramatically raises the cost of resolving the dispute. The corporate attorney can also advise you on winding up the company, a share buy out, and the law regarding the intellectual property that you believe you brought to the table.

If you want to get back what you consider to be your intellectual property, then there is no alternative to (1) the corporation hiring a competent business attorney to frame and manage the dispute and then (2) you hiring a business attorney to assist in taking control and protecting that intellectual property.

jperez50

Posted about 1 year ago.

my husband wants a divorce we have being married for 17 years have 2 children should i seek my own lawyer or wait for him to initiate the process what are my options?