Shareholder/LLC Membership Agreements

San Diego Shareholder and LLC Operating Agreement Attorneys

Shareholder agreements and LLC operating agreements define the relationship among owners — how decisions are made, how distributions are paid, how disputes resolve, and how an owner can or cannot exit. A well-drafted owner agreement prevents most disputes. A poorly drafted one — or no agreement at all — produces them. Khashayar Law Group drafts owner agreements that work and litigates them when they don't.

Owner Agreement Provisions That Matter Most

Key provisions include:

• Voting and decision-making — majority, supermajority, and unanimous consent thresholds; deadlock mechanisms.
• Distributions and tax allocations — pro rata, preferred return structures, tax-distribution provisions.
• Transfer restrictions — rights of first refusal, drag-along, tag-along, prohibited transfers, permitted transfers.
• Buy-sell triggers — death, disability, retirement, divorce, bankruptcy, voluntary withdrawal.
• Minority-owner protections — consent rights on major actions, information rights, anti-dilution provisions.
• Manager/director appointment and removal.
• Confidentiality and non-solicitation obligations.
• Dispute resolution — venue, choice of law, mediation/arbitration provisions.

When Owner Agreements Get Litigated

Disputes typically arise around three issues: (1) a co-owner taking distributions or compensation the others view as excessive, (2) deadlock among owners on a major decision, and (3) a triggering event (death, divorce, departure) where the buy-sell provisions don't work as expected. The firm drafts agreements to anticipate these scenarios and litigates them when prevention fails.

How Khashayar Law Group Handles These Matters

Khashayar Law Group approaches every matter with the same trial-ready discipline that produced over $165 million in recoveries firm-wide. Daryoosh Khashayar has tried cases before juries, before judges, and before the California Court of Appeal, where he has secured multiple reversals of Superior Court rulings. He has litigated against major insurers including GEICO and Progressive, and against large corporations including Walmart and Costco.

ABOTA Membership and What It Means for Clients

Daryoosh Khashayar is a member of ABOTA — the American Board of Trial Advocates, an invitation-only organization for attorneys with exceptional verified civil jury trial experience and judicial recommendations. The firm has recovered more than $165 million for clients and prepares every matter — transactional or litigated — with the trial-readiness corporate counterparties respect.

Frequently Asked Questions

What's the difference between a shareholder agreement and an operating agreement?

Both govern owner relationships, but a shareholder agreement is for corporations and an operating agreement is for LLCs. The substance is often similar — voting, distributions, transfers, buy-sells — but the governing statutes differ (California Corporations Code §158 et seq. for corporations; §17701.01 et seq. for LLCs).

Are oral side agreements among owners enforceable in California?

Generally not when they contradict the written operating or shareholder agreement. California courts apply the parol-evidence rule (Civil Code §1625, CCP §1856), which usually bars contradictory oral terms. Written agreements should reflect the actual deal.

Can a minority owner be forced out of a California LLC?

Sometimes. Operating agreements often include involuntary withdrawal provisions for cause (felony, breach of fiduciary duty, bankruptcy). Outside those triggers, California Corporations Code §17707.03 allows judicial dissolution in certain circumstances, but a forced buyout requires a contractual or statutory basis.

How are deadlocks among 50/50 owners resolved?

By the operating agreement's deadlock mechanism — typically a shotgun buy-sell, third-party mediation/arbitration, or judicial dissolution as a last resort. Without a mechanism, deadlock often ends in litigation under California Corporations Code §17707.03.

Should owners have a right of first refusal on transfers?

Almost always yes, in closely held businesses. A right of first refusal (ROFR) lets the existing owners buy any interest a co-owner wants to sell on the same terms offered by a third party, preserving control over who is in the ownership group.

Talk to a San Diego Shareholder Agreement Attorney

Khashayar Law Group serves clients throughout San Diego and California. Consultations are free and confidential. Call (858) 509-1550 or visit our office at 1350 Columbia St., Suite 303, San Diego, CA 92101.