Investor Lawsuits Against Corporate Officers and Directors

September 28, 2015

Q: I have a small tech company and there are 3 shareholders, and all 3 of them are board members. What can the directors do that is going to get them in trouble? A: It’s the officers and directors who face heightened liability relative to shareholders of the company. One classic form of increased risk […]

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Piercing The Corporate Veil

September 23, 2015

Q: I’m a shareholder of this company, and a director and an officer. A vendor who I owe a lot of money to but I can’t pay is threatening to pierce the corporate veil. What does that mean, and what is the likelihood of success? A: Piercing the corporate veil is the idea that for […]

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Corporate Formalities and Legal Actions Against Your Business

September 18, 2015

In the event of legal action, the court will question whether corporate formalities were observed. The corporation is required to have a board of directors and the board of directors is responsible for overall management of the corporation. Now, that board of directors might consist of just one founder, or it might consist of several […]

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Does a Startup Entity with No Employees Really Need a Formal Corporate Structure?

September 13, 2015

Q: I’m a one hundred percent shareholder and the only director of my startup at the moment. Do I need to go through all this? The corporate formalities of meetings of just me, the officers, the appointment of the officers if it’s just me, if I’m using a lease term, moving my office, getting a […]

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Corporate Board Meeting Formalities

September 8, 2015

Q: I’ve come to your office for the first time; I’ve waited way too long to hire you, and you see that I haven’t had a board meeting in two years. What’s the fix? A: A fix would be to have a board meeting. If, for instance, particularly if there’s only one director, you do […]

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Annual Obligations for Delaware Corporations

February 6, 2014

Important reminders for directors and officers of Delaware corporations: Delaware Annual Filing Obligations Your corporation’s Delaware annual report and franchise tax payment is due on or before March 1. All corporations formed in Delaware are required to file an Annual Report and to pay a franchise tax. Electronic filing of Annual Reports is mandatory. Your […]

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SEC Issues Proposed Crowdfunding Rules

November 7, 2013

On October 23, 2013, the U.S. Securities and Exchange Commission (SEC) issued proposed rules to allow securities crowdfunding pursuant to the Jumpstart Our Business Startups Act of 2012 (JOBS Act).  The proposed rules are subject to public comment and modification before implementation.  Comments are due on or before February 3, 2014.  Until final rules become […]

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Differences between Incentive Stock Options (ISOs) and Nonstatutory Stock Options (NSOs)

September 1, 2011

Here is an outline of some of the principal differences between two different types of compensatory stock options: incentive stock options (ISOs) and nonstatutory stock options (NSOs). This outline is intended as a starting point, but does not address all of the tax aspects of stock options or all of the differences between ISOs and […]

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Choice of Entity for a Startup Company

June 1, 2011

The choice of legal entity for your business is a critical decision for any startup company.  If you want to attract venture capital investment, you need to form a corporation, most likely under Delaware law, for a number of reasons.  Venture capital funds are generally unable to invest in an LLC, LP or other so-called […]

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