Legal Question in Business Law in California

family lawsuit son vs. parent

what constitutes ownership of a company that has never issued fully executed allocated stocks? My step son in suing us for one third of entire company. His monetary contribution is 0. the incentive plan was for 5 years, verbal, to obtain the one thirdof the profit upon sale providing he is still there. he quit at 3 years therefore voiding the agreement. he contends that we fired him. that is false. he quit. we have favorable accountant deposition disclaiming sons action. how to proceed?


Asked on 4/21/07, 3:54 pm

1 Answer from Attorneys

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

Re: family lawsuit son vs. parent

My fourth answer to the same question asked three different ways.

Issued stock certificates are only evidence of ownership. It is unnecessary to issue stock certificates in order for a corporation to have owners. If you are an "S" corporation, your IRS Form 2553 and your tax returns including schedule K and associated schedules K-1 will be highly probative of ownership. Proving a lack of vesting or that the son's declared interest was conditional will be an uphill battle in court, basically oral testimony against signed, filed tax returns that may be under oath.

If you have depositions, you must have filed an answer and probably are already represented by counsel.

If you haven't answered and/or aren't represented, be sure to handle these matters before deadlines arrive.

Read more
Answered on 4/21/07, 4:45 pm


Related Questions & Answers

More Business Law questions and answers in California