Legal Question in Business Law in California

Access to Corp. Office if my name isn't on lease?

Thank you for your time. Complicated situation but basically, my husband and I are divorcing and we are equal shareholders in a corp. The corp. pays his rent each month on his home/corp. office. Therefore, as half owner of corp. do I have any rights to accessing/entering his home/our office if he doesn't give me his permission or would it be considered trespassing/breaking and entering? I have cancelled check copies from the corp. account for these payments and in the memo box, it states ''office rent'' and the preprinted company address on these checks happens to be my address- he used to live here before we separated. I want to avoid going to court to have access granted, but I also don't want to get myself into trouble when all I want to do is gain access to business information which he is withholding from me. Of course, there are more details involved but I am asking IN GENERAL- what can I expect to take place under these circumstances if he calls the police for my entering without his permission or knowledge into our ''office'' which I pay half of the rent on as half owner of our company? Thank you!


Asked on 1/26/07, 9:45 pm

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Access to Corp. Office if my name isn't on lease?

As I understand it, he is not yet your "ex;" you are still married.

First, being a shareholder in a corporation does not give you any rights in its property. Even if I owned 51% of Microsoft, I would be trespassing if I entered its main office after hours without permission.

Same is true of a corporation of any size.

I also infer from your question that the house in question is not your family residence, i.e. that you do not have a right of co-possession due to it being owned as community property, tenancy in common or joint tenancy. If you are a co-owner, you can enter and occupy the house or any part thereof unless doing so would result in a breach of the peace, violate a restraining order, or breach a contract under which you relinquished your right of co-possession. The lease of one room to the corporation might be such a contract!

As a stockholder, especially a 50% holder, you have certain rights. First, a California corporation with two stockholders must have two directors (Corporations Code section 212). Both of you have equal voting strength when it comes to electing directors. Directors have unlimited rights of access to corporate books and records during normal business hours, and they also vote on and thus decide company policy in all respects.

Shareholders also have inspection rights (Corps. Code section 1601).

The Family Code contains provisions that may be controlling if the business is one that was developed and traditionally managed by your husband without your significant involvement, and the ownership interests (here, the stock) are community property. Family Code section 1100(d) gives management and control to the spouse who is operating or managing such a business. I think this requires determining whether the stock is separate property or community property. In any event, the managing spouse must give the other spouse full access to books and records and must report major deals in writing. F.C. sect. 1100(e).

In sum, I suggest that you obtain family law counsel to advise you on all aspects of your forthcoming dissolution proceedings, including how to protect your interest in this business.

Read more
Answered on 1/27/07, 2:17 pm
Edward Hoffman Law Offices of Edward A. Hoffman

Re: Access to Corp. Office if my name isn't on lease?

If you enter your ex's house without his permission you will be trespassing. If you force your way in you will be breaking and entering. Depending upon what you intend to do at the time you enter, you may also be committing burglary. If your goal is to avoid going to court, this is not the approach I would recommend.

I'm afraid you will have to enforce your rights through the courts if he is unwilling to work something out with you. Depending upon the nature of your business and what he is doing, you may want to act quickly and obtain injunctive relief. What kind of relief you should seek and how likely you are to get it will depend upon the specifics of your case.

Read more
Answered on 1/26/07, 9:53 pm


Related Questions & Answers

More Business Law questions and answers in California