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Started a business 20 years ago with three partners . I own 25% . My wife agreed that she doesn't want any of the business .

Chino Hills, CA |
Filed under: Business

Is this legal in California to just pay off my salary and not my profit shares for they're not guaranteed.

Attorney Answers 3

Posted

You can covert separate into community property and visa versa through a transmutation agreement. I cannot understand your final sentence.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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Posted

It's not clear whether your question is about your wife's interest in the company or distributions to you based on the company's structure and agreements among the partners.

THIS IS NOT LEGAL ADVICE. INFORMATIONAL PURPOSES ONLY. Legal matters are like thumbprints, no two are identical. Therefore, you should discuss your question with your own attorney or if you do not have an attorney, strongly consider hiring one. The information in this posting is for general information purposes only. No part of this posting should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

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Posted

In California, all assets and income derived or obtained or derived during the course of a marriage is considered "community property", of which your spouse has a 50% interest in. Unless there is an agreement in writing to the contrary, your wife has a 50% interest in the 25% interest of the business that you own with the three other partners.

The salary you are paid from the business is considered community property, so are the profits and losses from the business. Therefore, your wife has a 50% interest in the salary you are paid, and a 50% interest in the profits/losses from 25% of the business as a whole.

The opinions published on this forum should not be construed as creating an attorney-client relationship for any purpose, and is intended only for providing informal preliminary information to a legal inquiry.

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