[nullc]

Unless there are some major details missing here it sounds like the author got terrible legal advice.

One cannot cause another party to onw their own business through essentially a clerical error. Contracts are created out of a meeting of minds, without a shared understanding there could be no agreement. It might have been a gnarly account / tax mess to clean up, but that should have been the extent of it.

[ricardobeat]

That’s true - where or how a bank account is opened has no bearing on a company’s ownership structure, which is established by contract. There is something big missing in this story. Maybe the accountant also worked for his parents and handled everything in autopilot?

[mehrdadn]

Was this really a clerical error? He sold 90% of the shares to his dad and signed it without reading. If he forgot to sign it or signed the incorrect form, I'd call that a clerical error, but does not reading what you're signing also fall in that category?

[dmurray]

The clerical error is in treating the money deposited in CD Baby's account as belonging to CD Baby. It's completely normal that one business has funds in its bank account which are actually owed to another entity, and that's the way that it could have been treated here. With some technicalities of law (does this mean CD Baby was running an unlicensed money transmitter?) that fall under the category of "gnarly account / tax mess to clean up".

[jjeaff]

As long as you can prove that there was no intention of selling and that something like that was not even on the table, then no, merely signing a contract would not be enough.

Of course, usually, it's hard to prove that you didn't know what you were singing. The other party can just say, "ya, that was what we talked about then we drew up that contract."

[fhackenberger]

That's why it's legally necessary to involve a notary for these kind of transactions in Europe. They can be expensive, but not nearly as expensive as mistakes like this.