Q: My best friend owns a small business with her ex husband in California. It runs as a corporation of 2 people.
Her parents own the land and they pay month to month. Her parents want fair market value for rent. They can't pay fair market. Being evicted. She wants out of the business and he wants her to use her relationship with her parents to get a "good deal o.
n rent. Mediation took place and she is being told she has to give her full efforts to keep the corporation and ask her parents to favor them
She is emotionally abused by ex and wants out but cant?
A:
In California, when dealing with a situation involving a small business co-owned with an ex-spouse, several legal aspects must be considered.
First, if the business is a corporation, both parties have fiduciary duties to the corporation and each other as co-owners. This includes acting in the best interest of the business. However, these duties do not extend to leveraging personal relationships for the benefit of the business, especially in a situation like rent negotiations with family members.
Your friend’s obligation to the corporation does not require her to use personal relationships to secure favorable business terms. Mediation recommendations are not legally binding unless agreed upon and formalized by all parties.
If your friend wishes to exit the business, she has several options. She can negotiate a buyout with her ex-husband, sell her interest in the corporation (subject to any shareholder agreement terms), or pursue dissolution of the corporation if an agreement cannot be reached.
Given the complexity of her situation, involving emotional abuse and a mix of family and business relationships, legal guidance is crucial. It's important to consult with an attorney experienced in business and family law to explore all options and protect her interests.
In cases of emotional abuse, it's also important to consider personal well-being. If the abuse is impacting her decision-making or well-being, addressing this through appropriate channels, including seeking support services, is as important as the legal aspects.
A: Have the parents been offering a reduced rental rate up to this point? If the parents suddenly decided to charge FMV only to assist their daughter in her divorce negotiations that may explain the mediator's opinion. I choose not to use ChatGPT +legal.
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