If I’m currently on the verge of a business dissolution, what can I do in order to stop my soon-to-be ex-business partner from using the name?

We will meet all of our obligations in about 4 months and it is then that we will dissolve our business (LLC). Today I found out that my business partner has bought an Internet domain, created a new company, contacted our clients, vendors, etc. using the same name we currently have, only with a slight change. I have spoken to her about dissolving the company and even though nothing was written (no partnership agreement), we sort of agreed upon that neither one of us would use the name, in order to give us an equal chance to start with a brand new name. Our name has not been trademarked.

Asked on February 26, 2013 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

In the situation you describe, you could potentially sue her for breach of contract--the oral agreement between you when you "sort of agreed" that neither of you would use the name. You would have to prove in court the existence of this oral contract and its terms, which could be very difficult if she claims there was no such agreement (as the party suing, the burden of proof would be on you to establish the facts underlying your lawsuit). Furthermore, since you'd be seeking injunctive relief--a court order barring her from using the same--you'd have to sue in "regular" county court, not small claims court, which is more  complicated, costly, and slower.


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