Legal Question in Business Law in California

Re: Verbal contract

Since you did not enter into a binding written agreement, you should receive funds based upon your services rendered adjusted for your capital contribution. A court would award you a reasonable amount. Please call me if you have any other questions.

Re: Verbal contract

The previous answer seems to adopt the theory that there is no contract, and therefore you are entitled to reimbursement for services provided on a theory variously known as "contract implied in law" "implied contract," or "quantum meruit," which is legal Latin for "as much as he deserves." In some factual circumstances, this might be your best approach - for example, if the corporation lost money on the contracts, you might be better off being paid the fair value of your services rather than being treated as a co-owner of 1/3.

However, as the caption to your question suggests, you seem to think there is a verbal contract ("oral contract" is the preferred term), and I would agree.

Your legal problems are (1) to show that it exists; (2) to establish its terms by a perponderance of the evidence, and (3) to money collect damages or otherwise have a satisfactory remedy for its breach.

#1 is probably the easiest. It seems as though your co-promoters don't deny that they made some kind of deal with you. There's probably plenty of eyewitness and written evidence that you were to be a co-owner of this business.

Proving the details (e.g., a 1/3 interest) will be more difficult, and I can't help you with that by remote control, but perhaps you can dig up something other than your word against theirs to tip the balance of the scales in your favor. A court would probably attach importance to the amount of capital you contributed, for example.

Other issues I don't really have time to discuss here are the differences between partnership and corporation law, and the possibility that the business may have been a partnership for a while; whether there is a license; whether you are a director of the corporation; and whether you are legally entitled to be bought out or merely to an increase of your share from 24% to 1/3 (or maybe nothing at all).