Articles Posted in Start-Ups & Financing

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AdobeStock_283452126_Editorial_Use_Only-300x189It doesn’t take long on the internet to find extremist language, hate speech, and accusations of censorship. Often these are all found within the same post. Business owners have free speech rights, but free speech from any employee can expose a company to liability for false statements. It is important for business owners to create clear corporate policies about employee communications both on company websites and personal social media channels.

The Current Legal Standard

Current case law on this issue dates back a few decades. In 1964, the Supreme Court decided New York Times Company v. Sullivan, a First Amendment case involving published criticism of public officials. The Court found that Sullivan had indeed proven that the New York Times had published inaccurate statements about his office and subordinates. The fact that the statements were false did not, however, support his case for libel. The Court enacted a new standard of “actual malice.” This new rule means that an official must prove the false statement was published with the knowledge that it was false – or with gross recklessness – to sustain a libel case. Unless this legal definition of “actual malice” exists, the false statements are protected as free speech under the First Amendment.

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AdobeStock_232564567-300x200Many small business owners in Texas need to account for the future of the ownership and continuity of their business, and a buy-sell agreement will often accomplish these goals. When you need help crafting a buy-sell agreement, make sure you are working with a skilled Texas business attorney.

Texas Buy-sell agreements can come into play for both unforeseen and foreseen events among owners, including a business partner dying, becoming disabled, getting divorced, or declaring bankruptcy. Other complications can include a business partner changing their vision for the company, losing interest in the business, needing a cash infusion, or acting in bad faith.

Necessary Elements of a Buy-Sell Agreement

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AdobeStock_301407508_Editorial_Use_Only-300x200Digital currency is becoming an increasingly popular way of conducting business, particularly due to the rise in contactless payments brought about by the COVID-19 pandemic. The Office of the Comptroller of Currency (OCC) has issued new guidance to ensure that financial institutions use digital currency safely. The OCC’s requirements include the need for banks to understand the risks associated with digital currency, to have an effective risk management program in place, and to ensure that anti-money laundering and consumer protection laws are followed.

Business owners should make sure they understand the OCC’s requirements and how they affect their business. Structure Law Group, LLP’s California corporate lawyers can help business owners stay compliant with the OCC’s requirements and ensure they are safely engaging with digital currency. Our highly skilled corporate lawyers can also provide advice on how to protect your business from potential risks associated with digital currency transactions. Learn more about the OCC’s requirements, what they mean for business owners.

What the OCC Rule Says

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AdobeStock_114356861-300x200The term “startup” refers to a company in the initial stages of its operations, usually founded by one or more entrepreneurs aiming to develop a product or service, while having high costs and limited revenue. The first thing any startup founder will need to do is hire experienced Austin startup attorneys for assistance navigating the many challenges that will arise in the early stages of operations.

You will want to have a lawyer working with you early on because it will save you a lot on costs on the frontend, ensure the entity is properly formed and maintained, and establish an effective legal strategy as operations evolve. Make sure you are working with an attorney who understands the complexity of laws relating to startups and the relevant industry.

Early Startup Challenges

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AdobeStock_398358954-300x200Most businesses in California have confidential and valuable information to protect. Ensuring its protection is often a vital priority. In the ordinary course of business, companies will enter into numerous consulting agreements, service agreements and strategic alliances. These agreements are best made with the advice of a Los Angeles employment attorney who can help protect proprietary information by drafting enforceable non-disclosure agreements.

NDAs and best practices

The proper use of NDAs and noncompete clauses is to protect your company’s valuable proprietary information. NDAs can be used to safeguard trade secrets, and this is their preferred mode of operation. Nonetheless, if your company wants to protect trade secrets, you must show that you made some effort to protect those secrets. Informing hires that they will have access to proprietary trade secrets and signing an agreement not to divulge those trade secrets makes the effort enforceable and shows your company took measures to protect their intellectual property.

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AdobeStock_445476294-300x200When entrepreneurs are starting a business involving a partner or multiple partners, a buy-sell agreement will be a must-have because the agreement will establish protections for every party and the company if something happens or an exit event occurs with any of the business partners. Without this agreement, several variables may emerge, including a family member or other party taking ownership or a controlling stake without any concern for business success.

Formulating a buy-sell agreement can be a big demand, but you can get competent legal help in formulating this agreement. A Los Angeles business attorney with Structure Law Group, LLP can help you craft a buy-sell agreement that will focus on protecting your business for the long run.

When You Need a Buy-Sell Agreement

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AdobeStock_289024304-300x200When you are thinking about starting your own business, there can be a number of reasons that incorporating in Delaware may seem attractive. Delaware is a particularly attractive state for the incorporation of large corporations because it offers the best franchise tax rules and has typically been the most pro-management. It provides the best protection for board members against derivative lawsuits, there is less protection for minority shareholders than in California, and Delaware also offers limited statutory protection against hostile takeovers.

While all of these concerns can certainly be important, they may mean very little when your company is not ready for an initial public offering (IPO) or stock launch, or later rounds of equity financing. When you are debating this type of decision, be sure to speak with a California startup attorney at Structure Law Group, LLP.

Advantages of Incorporating in Delaware

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Untitled-design-22-300x200A limited liability company (LLC) is an option for people wishing to start a business in California that combines the tax advantages and flexibility of partnerships with the liability protection that comes with a corporation.

Starting an LLC in California still requires rigorous oversight. Make sure you are working with a Silicon Valley start-up company attorney at the best start-up law firm in Silicon Valley, Structure Law Group, LLP.

Limited Liability

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AdobeStock_330254153-300x200Classifying workers as employees or independent contractors has many different legal implications. In recent years, massive litigation efforts from big companies like Uber have highlighted confusion in this area of the law. This confusion led to the passage of AB-5, which was signed into law in September 2019. The law creates a test for determining whether a worker should be properly classified as an employee or an independent contractor. Business owners should understand this law so they can apply it properly to all workers and thus avoid unnecessary liability.

How AB-5 Changed the Rules of Classification

The new test for classification is known as the “ABC Test”:

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AdobeStock_183500602-300x200Business owners in Silicon Valley are well acquainted with all kinds of legal contracts. It is important to know your legal rights – as well as your obligations – under any contract. Many contractors try to bully others with threats of breach of contract and costly litigation. The experienced contract lawyers at Structure Law Group are here to help your business handle all types of breach of contract issues. Here are some of the most common disputes:

A Vendor’s Breach of Contract

Most businesses must enter into vendor contracts to get the goods and services necessary for their daily operations. If these vendors breach their contractual obligations, your business could be left unable to deliver on its own contractual duties to customers. A well-drafted vendor contract can help prevent confusion or ambiguity. Our contract attorneys can also help you determine the best course of action when a vendor breaches a contract. While litigation is sometimes necessary, it is not always worth the cost of a damaged business relationship with a trusted partner. An experienced contracts lawyer will be able to give you options for handling the problem.

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