Delayed Buyout? California Law Gives You 120 Days to Get Paid
“Just give me 120 days to get your money together.”
That’s what my client Sarah’s business partner said when she asked to be bought out. It sounded reasonable.
Except 18 months later, she still hadn’t seen a single dollar.
Sarah had spent eight years building a successful marketing agency with her college roommate. When she decided to step away to start a family, her partner promised to arrange financing for a buyout.
But instead of honoring that promise, he stalled.
For a year and a half, he made excuses while continuing to draw salary and control company resources.
Eventually, Sarah realized what was happening—he was waiting her out. Hoping she’d get desperate. Hoping she’d settle for far less than she deserved.
That’s when she called me and received FULL payment in just 45 days.
In this LinkedIn post, I share the law that helped Sarah turn things around: California Corporations Code Section 16701.
It says if no buyout agreement is reached within 120 days of a written demand, the remaining partner must pay immediately—or face legal consequences.
We enforced that rule.
Read the full breakdown here:
Pro tip: Never settle for verbal promises. California law is on your side—but only if you know how (and when) to use it.
Let’s protect your exit and your equity: www.lawpla.com
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