So, you’ve decided to incorporate your business in California and form a corporation. This corporate structure provides multiple benefits in California, including certain California tax benefits and legal protections. Every state has different requirements for forming a corporation, and California is no different. Whether you’re incorporating a new business, a small business converting to a corporation, or a multi-national corporation coming to the states, the experienced corporate attorneys at Structure Law Group, LLP can help. Contact our experienced business attorneys at 408-441-7500 or online to schedule your free corporate consultation.

Types of Corporate Entities in California 

There are multiple types of business entities in California. From a sole proprietorship to a general stock corporation, you must choose the entity that’s right for you. Once you elect to form a California corporation, you must choose which type of corporation best suits your business. California recognizes the following types of corporations:

Avoiding the Most Common Business Lawsuits 

Defending against any lawsuit has the potential to sink a Silicon Valley start-up. You must defend against even frivolous litigation especially so in today’s fast-paced and ever-expanding startup industry. There is no way to bulletproof a business from all litigation, but there are ways to greatly reduce the likelihood of lawsuits and their financial impact on your business. The experienced business litigation attorneys at Structure Law Group, LLP can help advise and protect start-ups against business litigation before it happens. While you can’t protect against all litigation, you can protect against the most common legal complaints against businesses. Business attorneys commonly defend against the following lawsuits:

  1. Breach of Contract Claims – Sometimes start-ups enter into contracts that aren’t favorable, or they run out of funding to fulfill their obligations. The business lawyers at Structure Law Group can review and draft the terms of any proposed contracts and include certain protective indemnification and liquidated damage clauses to reduce the cost of or prevent litigation.

He may have looked the part, spoken well in the interview, and had the right experience. In fact, he seemed like a great fit for your company. It’s only after a few months that you realize why he was available in the first place. Employees who clearly engage in wrongful conduct such as sexual harassment, violation of company policies, or constant tardiness are often easier to terminate than employees who aren’t the right fit for the corporate environment. San Jose businesses may fear wrongful termination litigation after firing an employee for causing dissent among the staff or failing to embody corporate values. California, like most states, is an “at will” employment state. This means that absent a contract, you have the right to terminate an employee at any time and for any reason that doesn’t violate state or federal law.

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Avoiding Wrongful Termination Lawsuits in California – 2 exceptions to the rule

1. Although California is an “at will” employment state, there are two notable exceptions to this rule. First, an employee with an employment contract may be protected from a termination “without cause.” This means that there must be a justifiable reason for her termination as defined in the employment contract. The employee may also be entitled to certain notice and disciplinary warnings before termination. We can review any employment contracts at issue to ensure a termination complies with these provisions.

In the Silicon Valley technology sector, intellectual property is more than just a buzzword. It is an asset with the potential to generate significant income for years to come. Intellectual property includes patents, copyrights, and trademarks. Many employers protect their intellectual property with invention assignment agreements and confidentiality agreements.

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What types of Agreement can be used to protect my company’s intellectual property?

There are many different types of agreements that employers can use to protect their intellectual property. The appropriate one for your business depends on what specific protections your business wishes to enact. An invention assignment agreement is a contract that establishes the employer’s ownership over all creations (including patents, trademarks, copyrights, trade secrets, and other inventions) that are created at the employer’s expense on company time.

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Many start-up corporations offer shares of stock in order to attract prospective employees and investors. Although there are several different types of stock out there, the two most common types include preferred stock and common stock. For more information about these types of stock, as well as the advantages and disadvantages of both, you should contact the experienced San Jose transactional attorneys at Structure Law Group today.

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In many instances, an offering memorandum – also commonly known as an OM or an “offering memo” – is something which is necessary in order to raise a certain amount of capital from corporate investors. This document is also one of the most important documents to hand to a company investor, in addition to the company’s business plan.

While the main purpose of a company’s business plan is to detail the company’s model and how the company plans to make money, the offering memorandum is a document which lays out what the company’s investors will obtain in return for their overall investment in the company. Once an offering memorandum is given to an investor, he or she can then choose to invest in the company based upon the financial information contained therein.

For more information about drafting a complete offering memorandum, you should contact the Silicon Valley corporate attorneys at Structure Law Group today.

Mergers between companies can get complicated. First, there are potential regulatory issues, at both the state and federal level. These regulatory issues can involve multiple agencies and be quite complex, requiring the use of lawyers specializing in such issues. This, of course, can drive expenses up considerably. Further, there are potential issues arising from differences between the companies merging, including differences in corporate culture. All of these issues require consideration, and many companies, especially companies engaging in their first merger, might not even be aware of what the potential issues are.

Regulatory Issues Often are the First and Most Significant Hurdle in a Merger

Under federal law, the Federal Trade Commission or the Department of Justice, depending upon the industry involved in the merger, must be notified of the merger if three tests are met. These tests are required under the Hart-Scott-Rodino Act, or HSR, the antitrust law that governs mergers. The most important test under HSR regulations is the size of the merger. Depending on if the merger breaks a value threshold, then the federal government may need to be notified. If your merger is large enough to require reporting under the antitrust laws, you must make an initial filing of certain documents known as a 4(c) filing, referring to the section of the HSR Act that requires the filing.

Fotolia_79495533_Subscription_Monthly_M-300x200Any business that deals with customers – meaning all businesses – has customers that are habitually slow to pay for the goods or services that they purchase. Unlike retail transactions such as those that occur at a grocery store, many business-to-business transactions are not immediately completed. Customers don’t necessarily have to pay before the goods or services leave the building. Payment terms might be 30 days net or 60 days net, but the customer has time to pay for what they have purchased. But what can you do when those 30 or 60 days pass by without a payment? And what can you do if that time continues to drag on and months go by without a payment from your customer?

Don’t Delay with Delinquent Customers

There are many reasons – and excuses – for delayed payments or nonpayment by customers. If you invoice by mail, it is possible that the invoice was not delivered, or that it was lost internally at the customer’s business. Depending upon the size of the business, it is possible that no one at the customer’s business knows that a bill has not been paid. Reasons and excuses aside, your business cannot afford to operate without being paid.

Fotolia_189107114_Subscription_Monthly_M-300x200Perhaps more so than any other kind of business structure, a partnership is heavily reliant upon the personal relationships among the partners. If those relationships are good, the partnership has a much better chance to function smoothly. If not, the personal nature of partnerships generally means that rocky personal relationships will lead to a rocky business relationship. All too often, partners join up based on prior personal relationships that were good, only to find they did not consider business philosophies before forming the partnership. Business differences can lead to personal differences, making it that much more unlikely that the partnership’s problems can be worked out.

Start Early to Avoid Partnership Disputes

Partnerships often are formed by people working in the same industry or friends who develop an idea together. They are common in the practice of law, as well as in a number of different small businesses. Partnerships are frequently a few individuals joining together to start a business. There are steps they should take to minimize the possibility of disputes. These steps include:

Fotolia_106115248_Subscription_Monthly_M-2-300x237Intellectual property is a valuable asset for a business. When a company licenses its IP out to other businesses, it can gain a competitive advantage and also reap the benefits of a lucrative, passive revenue stream.

When dealing with IP, most business owners immediately think of patents.  Patents cover inventions including processes, machines, compositions of matter, designs, and plants.  However, patents are only one type of valuable IP.  There are other types of intellectual property that can be licensed out to increase your business’s revenue.  These include:

  • Trademarks, which protect company or product names, as well as corporate logos, slogans, and other promotional materials; and