Corporate Litigation in California: Disputes Inside and Between Companies

Last updated: November 2026

Corporate litigation is the branch of business litigation that deals with how a company is owned and governed. It includes claims against directors and officers for breach of duty, fights between majority and minority shareholders, derivative suits on the company's behalf, demands to inspect the books, and petitions to dissolve the entity. It also covers disputes between companies, such as a failed acquisition. Kolmogorov Law, P.C. handles corporate litigation for closely held companies and their owners in Orange County, Los Angeles, and across California.

Call (909) 235-6116 or contact us online to discuss a dispute inside or between companies.

What makes a dispute corporate rather than commercial

A commercial dispute is about a deal. A corporate dispute is about the company itself: who controls it, who owes duties to whom, and who gets what when the owners stop agreeing. Our overview of business litigation explains the broader category.

The difference matters because the governing law changes. A contract case lives mostly in the Civil Code and the parties' agreement. A corporate case lives in the Corporations Code, the governing documents, and fiduciary duty law that the parties cannot draft away.

In my experience, the corporate cases are also more personal. The defendant is often a former friend.

Three ways these disputes start

A minority shareholder in a family company notices that the majority has been paying itself salaries that eat the profit, so there is never anything to distribute. She asks for the financials and is told to mind her own business.

Two equal owners of a closely held corporation stop speaking. Each holds half the shares and half the board seats, so nothing can be decided, and the company drifts while vendors go unpaid.

A director votes to approve a contract with a company he secretly owns. The other owners find out a year later from an invoice.

Director and officer duties

A director must perform the duties of the office in good faith and in a manner the director believes to be in the best interests of the corporation and its shareholders. The director must also use the care, including reasonable inquiry, that an ordinarily prudent person in a like position would use. (Corp. Code, § 309, subd. (a).) That standard, together with the duty of loyalty developed in the cases, is the foundation of most claims against insiders.

Self-dealing, diverting a corporate opportunity, and concealing material information are the usual theories. Our fiduciary duty guide covers the elements and the defenses, including the business judgment rule that protects honest decisions that turned out badly.

Shareholder rights: inspection and derivative claims

Information comes first. A shareholder may inspect the corporation's accounting books, records, and minutes on written demand, at a reasonable time, for a purpose reasonably related to the shareholder's interests. The articles and bylaws cannot limit that right. (Corp. Code, § 1601, subd. (a)(1).)

When the wrong was done to the corporation rather than to the shareholder personally, the claim usually belongs to the company and must be brought as a derivative action. The plaintiff must have held shares at the time of the transaction. The complaint must allege with particularity the efforts made to get the board to act, or the reasons for not trying. It must also allege that the board was told in writing of the ultimate facts or given a copy of the proposed complaint. (Corp. Code, § 800, subd. (b)(1), (2).) Our derivative action guide explains the procedure.

Deadlock, oppression, and dissolution

When owners cannot coexist, California provides an exit. Shareholders holding at least one-third of the outstanding shares, or any shareholder of a statutory close corporation, may file a verified complaint for involuntary dissolution. (Corp. Code, § 1800, subd. (a)(2).) The grounds include a board split evenly and unable to act, shareholder factions so deadlocked that the business can no longer run to advantage, and persistent and pervasive fraud, mismanagement, or unfairness toward shareholders by those in control. (Corp. Code, § 1800, subd. (b)(2) to (4).)

The corporation, or holders of at least half the voting power, may avoid dissolution by buying the plaintiff's shares for cash at fair value, with the court supervising the appraisal if the parties cannot agree. (Corp. Code, § 2000, subd. (a).) In most of the dissolution cases I have handled, the buyout is the real objective and the dissolution petition is the lever. Our buyout guide covers the valuation fights that follow.

Limited liability companies follow a separate statute with similar themes. Our shareholder and LLC member disputes page covers both.

Disputes between companies

The other half of corporate litigation involves two entities rather than the owners of one. A buyer discovers after closing that the seller's revenue figures were inflated. A joint venture partner walks away with the technology both sides funded. These cases combine contract, fraud, and corporate law, and they often turn on the representations in the deal documents.

What we do, and where the cases are heard

We represent minority owners who have been frozen out, majority owners and directors defending their decisions, and companies caught between factions. The first step is almost always a books-and-records demand or a response to one, because the financial picture decides everything that follows.

Corporate cases from Orange County are heard in the Superior Court, usually at the Central Justice Center in Santa Ana. Los Angeles cases typically go to the Stanley Mosk Courthouse.

What to bring to the first meeting

Bring the articles, bylaws, and any shareholder or buy-sell agreement. Bring the stock ledger and the minutes of the last several board and shareholder meetings. Bring the financial statements and tax returns for the past three years. Bring every written demand for records and every response. If you suspect self-dealing, bring the invoices, contracts, or bank records that raised the suspicion.

Frequently asked questions

What is corporate litigation?

Corporate litigation is litigation about the ownership and governance of a company. It includes claims against directors and officers, disputes between shareholders, derivative suits, inspection demands, and dissolution proceedings, along with disputes between companies arising from acquisitions and joint ventures. In California it is governed mainly by the Corporations Code and the fiduciary duty principles developed in the case law.

What does a corporate litigator do?

A corporate litigator represents shareholders, directors, officers, or the company itself in those disputes. The work includes drafting and responding to inspection demands, deciding whether a claim is direct or derivative, and filing or defending the lawsuit. It also includes the valuation issues that arise in buyouts and negotiating the separation of owners who can no longer work together.

Can a minority shareholder sue the majority in California?

Yes. A minority shareholder can sue directly for wrongs done to the shareholder personally, such as being denied inspection rights, and can sue derivatively on the corporation's behalf for wrongs done to the company, such as self-dealing by the controlling owners. Shareholders holding at least one-third of the shares can also petition for involuntary dissolution.

Is corporate litigation different for an LLC?

LLCs are governed by the Revised Uniform Limited Liability Company Act and by the operating agreement, which has more room to vary the default rules than corporate bylaws do. Member inspection rights, derivative claims, and judicial dissolution all exist for LLCs, each with its own requirements.

How long does a corporate dispute take to resolve?

A books-and-records dispute can resolve in weeks if the company complies after a demand. A contested derivative action or dissolution case in Orange County or Los Angeles usually takes a year or more. Many cases settle once the financial records are produced and both sides can see what the company is worth.

Talk to a California corporate litigation attorney

If you are in a dispute with co-owners, directors, or another company, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is located at 327 Magnet, Irvine, CA 92618, and represents companies and their owners in Orange County, Los Angeles, and throughout California.

This page provides general information about California law and is not legal advice. Outcomes depend on the governing documents, the facts, and the court.