Q: What happens if you are 50% owner of a corporation and have no written agreement and one partner wants out

A: As you might imagine, a few initial questions for you: [1] is there a signed shareholder's agreement for the corporation ... [2] what are the written documents that support the "50%" ownership and how does that ownership reflect the 80k - 30 k split ... and [3] do you have a signed Organizational Meeting Minutes document? This information will help move the resolution process forward ... thank you.

A: When you own 50% of a corporation without a written agreement and one partner wants to exit, it can lead to significant challenges. Without an agreement in place, the default corporate laws in California will guide the process. This often means that both partners must agree on major decisions, making it difficult to proceed if one party is opposed to dissolving the company.

Given that one partner invested $80,000 and the other $30,000, the differences in contributions will need to be addressed. You may need to negotiate a fair buyout based on each partner’s investment and role in the business. It’s important to document all financial contributions and consider any additional factors that contributed to the company’s growth.

If you and your partner cannot reach an agreement, seeking mediation or legal assistance can help resolve the dispute. In some cases, the court may need to intervene to dissolve the corporation and determine the division of assets. Taking these steps can help ensure that both parties are treated fairly and that the business is handled appropriately during the dissolution process.