Legal Question in Business Law in California

Re: Verbal Contracts

The more you have in document form the better. Did he offer to buy you out in a letter? Is the credit card a business card? Depending on the proof, you may have a good claim. You may contact me.

Re: Verbal Contracts

Your "verbal" (the legal term is "oral") contract is probably enforceable; the problem is establishing its terms.

Not sure how you can say "no official documents have been filed," since incorporating is necessarily the act of filing official documents, namely, the Articles of Incorporation. Whose name or names appear on the Articles? Also, within a few months after incorporation, the corporation is supposed to file a statement of officers and directors -- I suppose this was not done. Did you elect directors?

As you might imagine, locking out a co-owner is not a legally proper act. Further, he has no more right to order you to stay out than you have to order him to stay out -- unless one or the other has committed a crime or serious breach of the peace, neither has any such right with respect to the corporation's premises or property.

The business license, checking account and office space should be in the name of the corporation, never in the name of any stockholder. Applies to the credit card, too.

If you have inventory in the $60,000 area, this is not a "chicken feed" business. The two of you have been entirely too informal about your affairs. Things are now a mess, and likely to get worse. Further, it is your rights that seem (based on your version of the facts, of course) to be trompled upon.

If there really is a corporation, a vast body of law, both statutes and case law, govern the relationships between you, your co-promoter, and your corporation. The law provides a detailed set of ethical and good-faith standards for the conduct of each of you.

Get a business lawyer to explain and assert your rights and unwind this snarl before things get worse.

Re: Verbal Contracts

To an attorney who is specialized in business/litigation. Your question poses more questions than answers. Get out from in front of a computer screen and get in front of an attorney who continue solid legal advice based upon the questions, answers and facts you presented him/her. Don't wait. Your liability may grow even more and losses greater.I have been practicing law in this legal area for over 30 years and understand your problem well. I practice in the S.F. Bay Area and if you wish to contact me call at 925-945-6000.

Re: Verbal Contracts

Yes, you have rights. The question that arises is what you are going to do about. The real problem is the amount at issue. If you end up suing, the attorney's can quickly exceed the amount at stake.

Another questionis whether the business is operating as the corporation or whether it is a joint venture. Since you are on the credit card you have potential personal liabilities. You also have to make sure that your "friend" acknowledges (one way or the other) that you are in this venture and entitled to one half of the assets and profits.

To that end, put together all documentation that you have that shows your role in the venture.

I would be happy to sit down and discuss your options.

J. Caleb Donner

DONNER & DONNER

LEGAL WARRIORS�

325 E. Hillcrest Drive, Suite 242

Thousand Oaks, CA 91360

Tel: 805-494-6557

Fax: 805-494-0990

Email: [email protected]

Web: www.legalwarriors.com

Re: Verbal Contracts

You should file legal proceedings to dissolve your business and obtain an accounting from your partner. Without formalities, a corporation is treated as a partnership. Please contact our office for review of your documentation and consultation. 714 363 0220

Re: Verbal Contracts

To a qualified attorney to assist. If you did not file any formal papers, you are not legally incorporated as you indicate. Call counsel to discuss. Most will provide first visit or a half hour without charge.