Perhaps no asset is more valuable when beginning a company than capital. Raising capital, though, requires compliance with applicable security laws or risking legal repercussions. Here are five tips for startups engaged in the process of raising capital: Pick the Right Investors While getting someone to write you a check is important, the person writing that check is equally as important. Look for an investor who can contribute more than money to the operation. Preferably,…
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Incorporating a business involves more than just filing the articles of incorporation with the state’s secretary of state. Failing to perform the necessary additional steps can create financial and legal problems. What follows are 5 essential steps in business incorporation: Choose Your Management Team The selection of a board of directors is a straightforward but essential task in a valid incorporation. Based on the type of corporation or state of incorporation, the number of directors,…
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Startups often rely on independent contractors to handle essential duties as a company gets off the ground. The benefits are obvious: work is paid for as needed and you get clear returns for the money you invest. Waste is minimal – and you do not have to pay for employment tax or workers’ compensation insurance. However, you have to be careful about the demands you make on independent contractors as they work. What Makes a…
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Prior to launching your business, any limited liability company or corporation needs to pay California’s minimum franchise tax ($800) if using a California address as your company headquarters. A company that plans to have its base in, say, Oregon while registering to sell goods in California, may also need to pay the franchise tax fee, depending on various factors, including whether it leases space or hires employees in the state of California or if any…
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As the tech industry continues booming, we are seeing an increase in the number of disputes between employers and past employees over intellectual property (IP). Claims made against ideas developed while under contract have the potential to undermine the foundation of startups. Prior to launching a company with material IP that could be contested, entrepreneurs should seek the counsel of a qualified startup lawyer. Assignment Agreements in Company Contracts Tech industry employment contracts typically have…
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On October 30, 2015, the Securities and Exchange Commission approved new rules for equity crowdfunding by companies as part of the JOBS Act (Title III), also known as Regulation Crowdfunding. The rules will become effective May 16, 2016. Here is a summary of the basic rules every business should know if it is looking to raise capital under the new crowdfunding regime. Caps for businesses and single investors. Businesses can raise only up to $1…
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All commercial contracts have a number of material provisions at the end of the agreement which most people think of as “boilerplate” provisions and which most company representatives overlook when negotiating and signing the contract. Ironically, when a dispute arises, the statistics show that it is the “boilerplate” provisions that are most heavily litigated. This is because of the serious consequences that these can provisions have when a contract dispute arises. An experienced business lawyer…
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Starting a business without the capital to pay employees large salaries is a common problem in the startup world, and most founders find the answer to this problem by turning to equity compensation. Unfortunately, there are a lot of legal and financial nuances with the various types of equity compensation available to companies, and not every company handles this process perfectly, which can result in disastrous problems for the company in the future. Below are…
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A greatbusiness lawyer in Los Angeles is essential for startup companies as well as more established businesses. When you can get help in different areas of the law, you can save valuable time in your business dealings. Here are five key areas where every company needs qualified representation. Commercials TransactionsThe standard clauses at the end of contracts can lead to – and often are the main source of – major disputes down the road, which…
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