Tag Archives: Business

Board of Directors May Mortgage or Sell All of the Corporation’s Assets

But what you may not know is that the corporation’s board of directors has broad powers to mortgage or sell the corporation’s assets. Continue reading

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Selling a Stake in Your Business to Investors May Require a Securities Registration

More red tape on your way to starting or growing your business. Fortunately, there is a way to cut through some of that red tape – legally. Continue reading

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A Corporation’s Directors Could be Liable for Monetary Damages

So you are asked to become a corporate director or you are director of your own corporation. What could go wrong, right? Continue reading

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Shareholders Can’t Take Profit Distributions At Will

You are being judicious, prudent, and disciplined and are plowing your corporation’s earnings back into your corporation. Continue reading

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How a Business Should Issue Securities to its Founding Owners

When a business is organized, whether as a corporation or limited liability company, the business entity will need to issue to its founding owners their ownership interests (which are securities). The easiest and most straightforward way for founders to acquire … Continue reading

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How a Business Can be Subject to the Securities Laws

Whenever a business entity issues ownership interests, whether it is to existing owners or new investors, one must be aware that such issuance can be deemed an issuance of securities and that the securities laws may come into play.  If … Continue reading

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Flexible Purpose and Benefit Corporations

The California legislature, effective as of 2012, created two new types of corporations.  One is called the “flexible purpose corporation” and the other type is the “benefit corporation.”  Both types of corporations allow management to pursue not only for-profit purposes … Continue reading

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No Formal Operating Agreement

Frequently members (i.e. the owners) of a limited liability company (LLC) do not enter into a formal operating agreement (the equivalent of the partnership agreement).  If there is no formal operating agreement it does not mean that there are no … Continue reading

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Shareholders Do Not Own Corporate Assets

A corporation is, for corporate law purposes, a “person” separate from its owners.  As such, it owns the assets of the business, including, for example, customer lists, trade secrets and equipment.  A shareholder generally holds only legal title to the … Continue reading

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Collecting on a Promissory Note Given in a Sale of Business

If you sold your business and took back a promissory note from the buyer, you may be looking forward to the monthly payments and the nice revenue stream your business continues to provide after it was sold. However, if the … Continue reading

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