How to Force a Sale or Cash Out of Your Business in California

The leverage: a petition to dissolve

California law lets a qualifying owner ask the superior court to dissolve the company — to wind it up, sell its assets, pay its debts, and distribute what’s left. For an LLC, that right comes from Corporations Code section 17707.03. For a corporation, it comes from sections 1800 and following. The petition is powerful precisely because the other owners rarely want the company liquidated. Faced with that prospect, they are given a statutory off-ramp: buy the petitioning owner out instead.

The cash-out mechanism

Once a dissolution case is filed, the company or the other owners can elect to purchase the moving owner’s interest for cash — at fair market value in an LLC (§ 17707.03(c)) or fair value in a corporation (§ 2000). If the parties can’t agree on the number, the court appoints disinterested appraisers to set it.

Two roads, one result: you get paid

A well-pleaded dissolution claim puts the other side to a choice, and both outcomes cash you out:

They buy you out.

To keep the business intact, the remaining owners pay you the appraised value of your interest. You exit with cash; they keep the company.

They don’t — and the company is sold.

If no one elects the buyout, the court can order the business wound up. Its assets are liquidated or sold, and you receive your share of the net proceeds.

Two important wrinkles

California courts have refined how this leverage works, and the details matter. Once the buyout procedure is properly commenced, the owner who filed for dissolution generally cannot escape it by simply dismissing the lawsuit — the purchasing owners can hold them to the sale (Kennedy v. Kennedy). On the other hand, in some LLCs a majority of the members can vote to dissolve the company themselves before the buyout begins, which can change the strategic picture (Friend of Camden v. Brandt). Sequencing and timing are everything, which is why these cases reward early, experienced planning.

Before you file: leverage works best when it’s real

A dissolution petition is most effective when it’s backed by genuine grounds and a credible willingness to see it through. We help Southern California owners evaluate the strength of their position, document the conduct that supports dissolution, and decide whether to lead with a demand letter, a buyout proposal, or a filed case. For more than 45 years, Stone LLP has used this framework to get business owners unstuck and paid — in Orange County, Los Angeles, and across the region.

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Frequently asked questions

Can I really force the sale of my company in California?

You can petition the court to dissolve the company, which can lead to a court-ordered winding up and sale of its assets. More often, the petition prompts the other owners to buy you out at a court-supervised value to avoid the sale. Both outcomes let you cash out.

What if my partner refuses to buy me out?

Their refusal does not trap you. A dissolution petition under the Corporations Code lets you pursue either a buyout or a sale of the business through the court, without your partner’s consent.

How is my cash-out price determined?

If you and the other owners can’t agree, the court typically appoints disinterested appraisers to set the value — fair market value for an LLC interest under section 17707.03, or fair value for corporate shares under section 2000.

Can my partner avoid the buyout once it starts?

Generally not by simply dismissing the case. California courts have held that once the buyout procedure is properly underway, the moving owner can be held to the sale. Timing and procedure are critical, so early legal advice matters.