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Sale of California family business

Wrightwood, CA |

We have a family run business in California. I am one of 3 sons. I have a 1% ownership in the company. My dad sold the business and signed a non-compete. I however did not sign a non-compete. Since I had ownership in the company at the time of sale do I have to abide by the non-compete.

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Attorney answers 2


Your 1% share of the business was sold along with that of your dad and your brothers, and I haven't researched it, but I think that statute intends that minority shareholders or minority partners whose ownership shares are sold are included in the agreement not to compete with the buyer.

The code section is linked below.

See a business lawyer to have your particular documents reviewed.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.


The post at the link below summarizes (and provides a link to) the code provision by which a selling shareholder may agree to a geographically-restricted non-compete provision.

The statute only addresses sellers who so agree. My conclusion: If you did not sign the non-compete provision, then you are not subject to it; your dad's non-compete obligation does not affect you.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

Elizabeth Jones

Elizabeth Jones


California does not enforce non compete provisions.

Dana Howard Shultz

Dana Howard Shultz


Sometimes it does - please see the post at the link provided with my answer.

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