Legal Question in Business Law in California

Re: Non-compete and Stock Transfer

If you did not have a non-compete agreement in your general partnership agreement, your ex-partners cannot force you to have one now. Your stock transfer rights upon your withdrawal from your old firm are governed by the terms of that agreement, not by what your ex-partners may wish they had included in that agreement. .(Also, it is likely that, under California law, such a non-compete provision under your circumstances may be unenforceable anyway.)

While you may not encourage clients with whom you dealt at your old firm to breach their agreements with your old firm, you are free to compete with your old firm for all future work from such clients, and from any other potential clients.

Your approach, as set forth in your e-mail to Law Guru, seems most appropriate.

Naturally, the foregoing response is made without investigating the facts, and without reviewing the relevant documents, and should be considered for general reference, and not as a legal opinion.

I note from your zip code that you are located in Camarillo, which is relatively convenient to our office and to our attorneys who reside in the San Fernando Valley. If you wish to consult with us regarding this matter, or any future threats from your ex-partners, please feel free to call us.

Re: Non-compete and Stock Transfer

You can't be forced to sign a non-compete, and they are not very enforceable anyway; however, no one can stop the partner from suing you, either. Make sure you do not violate the 'unfair competition' rules to avoid legitimate suit. You should get competent legal advice and help in getting something in writing between the partners that defines who does what from now on. Feel free to contact me if interested in doing so. Spending a little money now is better than a lot of money later dealing with lawsuits.

Re: Non-compete and Stock Transfer

If you have a written agreement with your co-owners, it should speak to this issue. Ideally, it would have an exit strategy.

If you don't (or if you do, and it doesn't have an exit strategy), then you follow either the Corporations Code or the Uniform Partnership Act, depending upon a variety of factors.

A non-compete is certainly advisable for your soon-to-be former partners. And it would be warranted and almost undoubtedly enforceable, given that you are a co-owner and shareholder in a small corporation.

For further advice specific to your situation, seek out qualified counsel.