Articles Posted in Corporations

California recently surpassed France and Brazil to become the world’s sixth-largest economy. As such, California is home to many businesses with significant assets. In this fast paced, value creating culture, it is not unusual for asset purchase agreements to be completed with pre-printed forms and templates.

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Unfortunately, many business owners learn the hard way that an asset purchase template fails to address the particulars of the business assets being acquired or sold and provides inadequate protection for the financial and legal interests at stake. An experienced corporate attorney can help protect your company by structuring an asset purchase agreement that is suited to your transaction, enforceable, and able to cover a wide array of contingencies that may arise.

Many Things Can Go Wrong in an Asset Purchase Transaction

Fotolia_148839470_Subscription_Monthly_M-300x200Risk management is an important strategy for any business. Silicon Valley businesses can protect themselves from liability with effective indemnification provisions – These provisions can be instrumental to easing the financial burden of a lawsuit against your company.  Rather than your company paying for the legal costs of a lawsuit due to one of your business partners, you can obligate your business partners to pay for the legal costs through an indemnification provision. Learn more about the terms and conditions of indemnification and how to protect your business from future legal liability.

How Do I Indemnify My Business?

The first step to drafting an effective legal indemnification is identifying the specific types of liability your business needs to be indemnified from. For example, some businesses, such as theme parks, are based around services which are potentially dangerous to consumers. It is important that these businesses appropriately indemnify themselves against claims by those who use their business facilities. Specifically, theme parks may want to consider obtaining an indemnification in any contract with repair or technician companies providing repair and maintenance to their theme park rides. Professionals with high rates of malpractice claims (such as obstetricians) must also consider the appropriate means for indemnifying themselves against legal claims by patients.

Real-Estate-Investment-300x200Real estate is a major investment in Silicon Valley. The law provides many ways to protect real estate assets.  For instance, many investors choose to place real estate under the ownership of a corporation or limited liability company (“LLC”). An experienced Silicon Valley real estate attorney can help guide investors through every step in acquiring real estate. Structure Law Group will help you with all of your real estate investment needs, such as identifying potential acquisitions which are appropriate for your business, performing due diligence investigations, determining whether the investment should be made in the name of a business entity, determining which type of business entity is appropriate for your needs, and executing the transaction documents to give your new asset full legal protections.

Which Legal Entity is Right for My Real Estate Investments?

Both corporations and LLCs are separate legal entities with legal identities separate from that of their owners. However, these different types of entities are treated differently for income tax purposes. It is important to choose the right kind of entity to make sure your real estate is properly protected.  For instance, LLCs can allow for profits and losses to flow directly to their members, without being taxed on a corporate level. Corporations, on the other hand, must be taxed as a separate legal entity. Corporations also do not provide their officers and owners with the same extent of legal protection from claims and liability enjoyed by members of an LLC.  Nonetheless, every situation is unique, so a full analysis of which entity is always right for you is always necessary to make sure you are getting the most out of your investment.

Fotolia_178717790_Subscription_Monthly_M-300x125California creditors have a variety of tools available to enforce their legal rights. The appropriate tool will depend on the circumstances. For example, in some instances, a lien may be placed on real and/or personal property in order to protect or enforce a creditor’s rights.  In the case of a debtor’s interest in an LLC, a charging order may be obtained creating a lien against the debtor’s membership interest in the LLC. Learn more about what a charging order is, how it works, and when it is the best tool for a creditor. An experienced San Jose corporate attorney can help your business find the best tools for enforcing creditors’ rights against any debtor.

What is a Charging Order and When is it Appropriate?

When a creditor has obtained a judgment against a debtor, the creditor may obtain a variety of different orders or liens to enforce the judgment against the debtor’s assets. These can include a garnishment of the debtor’s wages, a levy of the debtor’s bank accounts, or the creation of a lien against the debtor’s real estate and personal property. When the debtor possesses an interest in a limited liability company (LLC), a court may issue to the creditor and against the debtor a charging order in order to allow the creditor to try to enforce the judgment against the debtor’s membership interest in the LLC.

There are a variety of ways for a corporation to sell its assets without compromising its structural integrity or otherwise damaging the business.  One common method by which California corporations can sell assets is a stock purchase agreement.  For example, if an investor (which can even be a company) wants to buy stock in a company,

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the executing instrument is typically a stock purchase agreement.  The stock purchase agreement allows a business to sell its assets – and sometimes, certain voting and management rights – without actually selling the business itself.  In order to protect the assets at issue and protect the legal interests of the companies involved, a California corporate transactional attorney can help businesses effectively negotiate and execute stock purchase agreements.

What is a Stock Purchase Agreement?

California business litigation is a long and complicated process. It is important to have an experienced litigator assess your case and review your lawsuit complaint to ensure that the process is done correctly from the start. This blog post goes over the process, and how an experienced California business litigation attorney can protect your company’s legal interests.litigation-300x139

The Stages of Business Litigation

The first step in business litigation is to prepare a California business lawsuit complaint and file it with the appropriate court. The complaint should specify the exact legal harm that has been suffered and the relief sought by the plaintiff. This will generally take the form of an estimate of the financial damages suffered as a result of the legal harm. Once the complaint has been filed, the lawsuit has officially started. The complaint must then be served upon the opposing party. That party has a short window in which to file an official response to the complaint.  If they fail to do so, the complaining party may ask the court for a summary judgment to get their requested relief. The vast majority of defendants answer lawsuits in a timely manner. Summary judgments on service grounds are, therefore, rare. Once an answer has been filed, the next phase of the lawsuit begins.

Silicon Valley companies have human resource (HR) departments to manage employment issues. HR departments both limit the company’s exposure to legal liability for employment-related claims and

facilitate the timely resolution of workplace disputes. For small companies, however, it can be difficult to train, staff, and maintain HR employees. A Silicon Valley employment law attorney can help you determine whether an HR department is right for your business.

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The Cost-Benefit Analysis of Human Resources 

For California business owners, knowing what expenses are deductible from tax liability is not just a sound financial strategy. It can also prevent criminal liability for tax fraud and other white collar crimes. Ensure that all your financial and legal interests are protected by consulting with an experienced California tax law attorney.

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Common Deductions

Tax liability is a function of a company’s profit less its operating and business expenses. These expenses are known as the taxpayer’s deductions. Thus, the greater a company’s deductions, the less overall tax liability it will have. This causes many companies and business owners to push the boundaries of allowable business deductions. While this can reduce the company’s initial tax liability, it can also result in a time-consuming audit and heavy fines. In serious cases, it can even result in criminal liability. It is, therefore, very important for business owners to ensure that they are making appropriate, lawful deductions.

For many businesses, promissory notes are a significant asset in the company’s financial portfolio. Securing such a promissory note with a personal guarantee can be an guarantee-300x200important step in protecting the company’s financial interests. Unfortunately, many business owners learn the hard way that a simple promissory note template is not always sufficient to enforce the personal guarantee, thus wasting this valuable asset. Learn more about how a Los Angeles business attorney can help you secure all your assets to protect the financial health of your business.

The Benefits of a Personal Guarantee

When a personal guarantee is accompanied with a promissory note, a personal guarantee acts like collateral. The asset (promissory note) is protected by the collateral (the guarantor’s promise to pay, and the ability to sue the guarantor personally for noncompliance with the terms of the promissory note). As with any collateral, a personal guarantee gives the asset more security. Businesses can therefore protect their financial interests by protecting promissory notes with personal guarantees.

Of the many challenges faced when starting a business, creation of a company’s bylaws can be one of the more complex, technical, and overwhelming challenges of them all. While daunting, such agreements can protect startup companies from liability in business transactions. A Silicon Valley corporate lawyer can help your business create the bylaws which will best meet your legal needs.

  • Identify the needs of your businessFotolia_104278045_Subscription_Monthly_M-300x169

Before crafting any corporate policy, it is important to determine your goals. Does the policy need to protect the company from legal liability? Reduce operating expenses? Provide clarity for executing important business discussions? Identifying clear goals will allow for bylaws to effectively address such needs. Owners should also be sure to consider both the short and long-term needs of the business. Business, financial, and legal concerns can change over time. Effective bylaws will allow the business to adapt to the dynamic reality of the marketplace.