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San Diego Law: What is the Business Judgment Rule? (Part I)

San Diego Law: What is the Business Judgment Rule? (Part I) The business judgment rule provides personal immunity to directors of a corporation from being sued by the shareholders and/or investors if a decision made by the directors turns out to be a bad one. The business judgment rule [...]

By | 2017-11-22T22:16:44+00:00 November 22nd, 2017|

San Diego Startups: What’s in a Business Name?

San Diego Startups: What's in a Business Name? When you think about starting up a new business, the first thing most people think of is a name. Usually, people choose a name for the business that is special to the people starting the business. Maybe something about father and [...]

By | 2017-11-22T22:01:44+00:00 November 21st, 2017|

The Duty to Mitigate Damages

The Duty to Mitigate Damages The duty to mitigate requires a party suffering a breach of contract to take reasonable steps to mitigate those damages. In general, if you or your business suffers a loss or is damaged because a third party has breached a contract, you have the [...]

By | 2017-11-22T21:36:37+00:00 November 20th, 2017|

An Action Plan for Protecting Your Trade Secrets

An Action Plan for Protecting Your Trade Secrets As we discussed here, trade secrets are often the key to seizing and maintaining marketshare in a fiercely competitive marketplace. Trade secrets are protected under the California version of the Uniform Trade Secrets Act ("UTSA"). See Cal. Civ. Code §§ 3426, [...]

By | 2017-11-22T21:17:23+00:00 November 19th, 2017|

When is “Lack of Consideration” a Defense to Breach of Contract?

When is "Lack of Consideration" a Defense to Breach of Contract? As we wrote more fully here, a legally enforceable contract requires three main ingredients: offer, acceptance, and consideration. "Consideration" is something of value exchanged to make a contract legally binding. "Lack of consideration" is a valid defense to [...]

By | 2017-11-22T21:00:16+00:00 November 18th, 2017|

Impossibility as a Defense to Breach of Contract

Impossibility as a Defense to Breach of Contract   Sometimes events happen that make it impossible for a business to meet its obligations under a contract. In true situations of impossibility, impossibility becomes a defense to a claim for breach of contract; that is, the courts will say that [...]

By | 2017-11-15T23:17:18+00:00 November 16th, 2017|

The Implied Covenant of Good Faith and Fair Dealing

The Implied Covenant of Good Faith and Fair Dealing Every business contract -- indeed, every contract -- contains an implied covenant of good faith and fair dealing. Breaching this implied covenant can subject your business to litigation and to damages. A good business lawyer can help. What is the [...]

By | 2017-11-14T22:33:58+00:00 November 15th, 2017|

The Importance of Written Contracts: Avoiding Vague and Uncertain Terms

The Importance of Written Contracts: Avoiding Vague and Uncertain Terms   Any good business lawyer will counsel a business owner on the need for written contracts. One important reason for reducing your agreements to writing is to avoid vague and uncertain terms that will not or cannot be enforced [...]

By | 2017-11-14T21:54:10+00:00 November 14th, 2017|

What is the Difference Between the Duty to Indemnify and the Duty to Defend?

What is the Difference Between the Duty to Indemnify and the Duty to Defend?   Many business contracts include duty to indemnify and duty to defend provisions. The question arises: What is the differences between the two duties? This article delineates important differences. In short, the two duties are [...]

By | 2017-11-14T21:57:28+00:00 November 13th, 2017|

What is New with California Social Purpose Corporations?

What is New with California Social Purpose Corporations?   On October 11, 2011, to great fanfare, California enacted the Corporate Flexibility Act of 2011 creating two new corporate forms called “flexible purpose corporations” and “social benefit corporations.” In 2014, those were combined and renamed as “social purpose corporations.” The [...]

By | 2017-11-13T20:32:58+00:00 November 12th, 2017|

What is a California Limited Partnership?

What is a California Limited Partnership?   In simple terms, a California limited partnership is a partnership with one or more partners who are "limited" in terms of management and liability. A California limited partnership can be best understood in comparison to a California general partnership. California General Partnership: [...]

By | 2017-11-13T20:12:36+00:00 November 11th, 2017|

What is a Breach of Contract?

What is a Breach of Contract?   In every aspect of running your business, you are constantly dealing with contracts. So, what is a “breach of contract?” In theory, the legal concept is common-sense: You have breached the contract if you fail to do what you agreed to do. [...]

By | 2017-11-08T21:03:59+00:00 November 10th, 2017|

How a Good Business Lawyer Helps You Survive in the Marketplace

How a Good Business Lawyer Helps You Survive in the Marketplace   Starting any business is risky. According to one report, eight out of 10 new businesses fail within the first 18 months. As the article says, that is a "whopping 80% crash and burn" rate. However, there are [...]

By | 2017-11-08T20:53:58+00:00 November 9th, 2017|

Advice on How to Avoid False Advertising Claims

Advice on How to Avoid False Advertising Claims   Both federal and California law prohibits unfair and deceptive business practices including making false statements in advertising and on your packaging. Here is a brief description of the legal issues and some advice on how to avoid false advertising. What [...]

By | 2017-11-06T21:25:18+00:00 November 8th, 2017|

What Should be Included in a California Partnership Agreement?

What Should be Included in a California Partnership Agreement?   Being in business with friends and/or colleagues can be highly rewarding, both personally and economically. You and your partners share a common vision, share similar values, and work together to build self-worth and achieve business success. But, disputes arise [...]

By | 2017-11-06T21:12:13+00:00 November 7th, 2017|

Medical Practice Breakups: Are Patient Records Trade Secrets?

Medical Practice Breakups: Are Patient Records Trade Secrets?   Some of the most acrimonious business "breakups" are ones involving medical practices. When a physician separates from his or her former practice, there is a natural tendency to want to migrate the patients to the new practice. That raises the [...]

By | 2017-11-06T20:48:38+00:00 November 6th, 2017|

A Checklist for Hiring Your First Employee

A Checklist for Hiring Your First Employee   Starting your own business is exciting, but also challenging. One of the most daunting tasks is formally hiring your first employee. This task is risky, too. Here is a checklist of steps to take before you officially become a boss. Define [...]

By | 2017-11-06T20:28:40+00:00 November 5th, 2017|

What is a California General Partnership?

What is a California General Partnership?   A California general partnership is a simple and intuitive concept. When two or more people own and operate a business without a formal corporate structure, they are a general partnership. Put another way, a California general partnership is very similar to a [...]

By | 2017-10-16T15:36:16+00:00 November 4th, 2017|

Advantages for California Businesses Using Arbitration Clauses

Advantages for California Businesses Using Arbitration Clauses   As a mechanism for alternative dispute resolution, arbitration has many advantages for California businesses. Serious consideration should be given to including arbitration clauses in all California contracts. What is Arbitration? Arbitration is an out-of-court process for settling disputes that might commonly [...]

By | 2017-10-16T15:36:01+00:00 November 3rd, 2017|

Using a California Employment Contract to Achieve Non-compete Goals

Using a California Employment Contract to Achieve Non-compete Goals   It is well-known that non-compete agreements in California are unenforceable outside of a couple of limited circumstances. However, a well-drafted California employment agreement can accomplish many of the goals that businesses seek to achieve with a non-compete agreement. Most [...]

By | 2017-10-16T15:35:45+00:00 November 2nd, 2017|

Five Steps for Preventing Raids on Your Employees

Five Steps for Preventing Raids on Your Employees   Staffing talent is often one of the most valuable assets for California companies. Preventing raids on your employees is important, particularly when a high-level, managerial employee is departing. The last thing you want is a flood of other employee departing, [...]

By | 2017-10-16T15:35:31+00:00 November 1st, 2017|

What is a Fictitious Business Name?

What is a Fictitious Business Name?   When you conduct business in California under any name other than your name or the exact name of your California corporation or California LLC, you are operating under a “fictitious business name.” For example, if you incorporated as "ABC Smartphone Store, Inc.," [...]

By | 2017-10-16T15:35:11+00:00 October 31st, 2017|

Can a California LLC Have an Oral Operating Agreement?

Can a California LLC Have an Oral Operating Agreement?   Sometimes, new business owners are leery of forming a California Limited Liability Company ("California LLC") as opposed to a California corporation or California partnership because they are daunted by the need for an operating agreement. Most good operating agreements [...]

By | 2017-10-16T15:34:56+00:00 October 30th, 2017|

The Importance of a Custom-Drafted Operating Agreement for a California LLC

The Importance of a Custom-Drafted Operating Agreement for a California LLC   California Limited Liability Companies ("LLCs") are governed by their operating agreements. California LLC operating agreements do not have to be formalized or even in writing (however, it is a good idea to do so!). The California Corporations [...]

By | 2017-10-16T15:34:41+00:00 October 29th, 2017|

Basic Differences and Similarities Between a California Corporations and a California LLC

Basic Differences and Similarities Between a California Corporations and a California LLC   When forming your California corporate entity, you have many options including forming a California corporation or creating a California limited liability company (" California LLC"). Most people are familiar with the idea of how California corporations [...]

By | 2017-10-16T16:02:18+00:00 October 28th, 2017|

Checklist of Licenses, Registrations, Permits, and Tax Numbers to Operate Your Business in California

Checklist of Licenses, Registrations, Permits, and Tax Numbers to Operate Your Business in California As we wrote recently here, nearly every business needs some kind of business license or permit to operate in California. Here is a checklist of licenses, registrations, permits, and tax numbers that you might need. [...]

By | 2017-10-16T15:33:54+00:00 October 27th, 2017|

Commercial Leases 101: What New Business Owners Need to Know

Commercial Leases 101: What New Business Owners Need to Know Starting your own business is both exciting and nerve-wracking. You are exerting a tremendous amount of energy and creativity, but there are so many details. Finding your perfect retail or office space is just as important and involved. It [...]

By | 2017-10-16T15:33:40+00:00 October 26th, 2017|

Laws You Must Consider When Advertising in California

Laws You Must Consider When Advertising in California Your new startup has to advertise and market in order to seize market share. If your business wants to retain market share, you are going to need to market your products or services and advertise as well. Marketing is supposed to [...]

By | 2017-10-16T15:33:20+00:00 October 25th, 2017|

Personal Guaranties Put Your Personal Assets at Risk

Personal Guaranties Put Your Personal Assets at Risk Almost every company has financing, particularly small companies. Almost as often, the lender requires that the company owners -- the principals -- sign personal guaranties for the loan amounts. Some personal guaranty agreements are quite onerous and give the lender: The [...]

By | 2017-10-16T15:32:55+00:00 October 24th, 2017|

Pros and Cons of Buying a Franchise

Pros and Cons of Buying a Franchise If you have been thinking of starting a business or buying a business, it is likely you have also thought about buying a franchise. A franchise is a type of business where you pay a franchising fee and the owners or "franchisors," [...]

By | 2017-10-16T15:32:36+00:00 October 23rd, 2017|

How to Verify Accredited Investor Status for 506(c) Offering

How to Verify “Accredited Investor” Status for 506(c) Offering As we discussed here, using Rule 506(c) under Regulation D has some significant advantages, the most important of which are the ability to engage in general solicitation and advertising and the non-requirement that the investors have a preexisting relationship with [...]

By | 2017-10-16T15:32:20+00:00 October 22nd, 2017|

Checklist of Legal Issues When Buying or Selling a Business

Checklist of Legal Issues When Buying or Selling a Business There are many legal issues to consider when buying or selling a business. It is a complicated and confusing process. You are going to need a talented and skilled corporate attorney to help. Here is a quick checklist of legal issues [...]

By | 2017-10-16T15:31:55+00:00 October 21st, 2017|

When to Create a Corporation for Your Child’s Business

When to Create a Corporation for Your Child’s Business My first foray into entrepreneurship was a retail business selling designer sunglasses, windproof lighters, and just about any other $10-$100 items I could get my hands on back in the early 1990’s. Before the internet, there was a special telephone [...]

By | 2017-10-16T15:31:37+00:00 October 20th, 2017|

Merger and Acquisition Lessons from Walgreens and Rite Aid

Merger and Acquisition Lessons from Walgreens and Rite Aid There are two important lessons to be learned from the recent efforts by Walgreens to buy Rite Aid: Never give up. You have options; if you cannot accomplish a stock purchase, then go for an asset purchase. Background As recently [...]

By | 2017-10-16T15:31:18+00:00 October 19th, 2017|

Bad Actors Under Rule 504 of Regulation D

Bad Actors Under Rule 504 of Regulation D   Regulation D provides an exemption from registration under the Securities Act of 1933 for the offer and sale of securities. As you may know, the Securities and Exchange Commission made significant changes to Regulation D that took effect in 2017. [...]

By | 2017-10-16T15:30:55+00:00 October 18th, 2017|

Six Good Reasons to Sell Your Business NOW

Six Good Reasons to Sell Your Business NOW   Running your own business may have been a lifelong dream, but there is no denying that running your own business is a lot of hard work. Frankly, the charm may have worn off for your business, your business may have [...]

By | 2017-10-16T15:30:29+00:00 October 17th, 2017|

Are You an Accredited Investor?

Are You an Accredited Investor?   Accredited investors are a unique category of investors who are allowed to invest in certain types of securities that preclude unaccredited investors. The federal government regulates the sale of securities under the Securities Act of 1933. Many people think of "securities" only as [...]

By | 2017-10-16T15:28:54+00:00 October 16th, 2017|

What is the California Franchise Tax?

What is the California Franchise Tax? Under California law, all corporate entities must pay an annual franchise tax. The minimum amount due is $800. The tax is collected by California Franchise Tax Board and applies to the following: LLCs (Limited liability companies); S-Corps (Subchapter S corporations); Corporations; Professional corporations [...]

By | 2017-10-06T19:38:26+00:00 October 15th, 2017|

Formalize Your Business Structure to Avoid an Accidental Partnership

Formalize Your Business Structure to Avoid an Accidental Partnership   When you work with another person or a group of people, if you do not formalize your business entity (as a corporation or otherwise), then, by default, you may unknowingly create a partnership under California's Uniform Partnership Act (“CUPA”). [...]

By | 2017-10-06T18:59:52+00:00 October 14th, 2017|

Mergers and Acquisitions: Assignment of Contracts

Mergers and Acquisitions: Assignment of Contracts If you and your company are planning to acquire or merge with another company, one of your main due diligence tasks will be to review all the various company and business contracts to ensure that they are assignable to the new business entity. [...]

By | 2017-10-06T00:29:11+00:00 October 13th, 2017|

Does Your Business Need Employee Non-Disparagement Agreements?

Does Your Business Need Employee Non-Disparagement Agreements?   Businesses are increasingly dependent on having a good reputation in the market-place. Moreover, as the labor market tightens, having a good reputation as an employer and as a place to work is becoming increasingly important. As such, many businesses are now [...]

By | 2017-10-06T00:19:43+00:00 October 12th, 2017|

For Group Practitioners: Tips for Selling Your Part of the Medical Practice

For Group Practitioners: Tips for Selling Your Part of the Medical Practice When selling any medical practice, including solo practices, there are many important steps to take such as getting an appraisal, advertising, getting your financials in order. For group practitioners, there are some extra considerations. Here are a [...]

By | 2017-10-05T23:32:45+00:00 October 11th, 2017|

California Businesses: Are Your Websites ADA, Unruh Act, and DPA Compliant?

California Businesses: Are Your Websites ADA, Unruh Act, and DPA Compliant?   Nearly every successful business has a website and an internet presence. Arguably, no business can succeed in today's competitive marketplace without a web presence. Recent case law and legal trends demonstrate that businesses must now consider whether [...]

By | 2017-10-05T22:59:13+00:00 October 10th, 2017|

The Importance of Paying Your California Franchise Tax

The Importance of Paying Your California Franchise Tax   Every year, companies that are organized as California corporations, California S-Corps, California limited liability companies (LLCs), and California limited partnerships (LPs) must pay taxes to the California Franchise Tax Board. Failure to do so causes your company to lose its [...]

By | 2017-10-05T22:48:09+00:00 October 9th, 2017|

California Business Contract Basics

California Business Contract Basics   Offer, Acceptance, and Consideration The basics of contract formation are offer, acceptance, and consideration. These are the three components of what is called a "meeting of the minds”. An offer is an expression by words or action to another person or entity of your [...]

By | 2017-10-05T22:11:37+00:00 October 8th, 2017|

Intellectual Property for California Companies

Intellectual Property for California Companies Intellectual property (IP) rights are often the most valuable asset possessed by a California company. As we previously discussed here, almost every aspect of your business has legally protectible and valuable IP characteristics including: Your business name; Distinctive packaging; Logos; Source codes; Sales literature; [...]

By | 2017-10-05T21:43:15+00:00 October 7th, 2017|

Will Midwives Soon be Able to Form California Professional Midwife Corporation

Will Midwives Soon be Able to Form California Professional Midwife Corporations? California State Senator Jerry Hill has introduced new legislation, SB 798, that would add a licensed midwives corporation to the list of permitted professional corporations in California. The bill would also add licensed midwives to the lists of [...]

By | 2017-10-05T21:19:45+00:00 October 6th, 2017|

Conflicts of Interest in Small Businesses

Conflicts of Interest in Small Businesses Conflicts of interest arise often in small businesses, so identifying them and having a policy in place to prevent them are crucial. Generally, a conflict of interest refers to a situation where a principal in the business, such as an officer or director, [...]

By | 2017-10-08T01:56:51+00:00 April 21st, 2017|

When Businesses Owners Face Personal Liability for Corporate Actions

When Businesses Owners Face Personal Liability for Corporate Actions Directors and officers of a corporation who participate in or personally direct tortious conduct can be found personally liable, rather than being shielded from liability by the corporation. To be personally liable, the director or officer must “authorize, direct, or [...]

By | 2017-10-08T01:55:16+00:00 April 19th, 2017|

Risks and Rewards of Taking a Political Stance for You and Your Business

Risks and Rewards of Taking a Political Stance for You and Your Business Businesspeople today often take political stances and air their views in the news media, but doing so may negatively affect their businesses. When considering whether you or your business should express political views to the public, [...]

By | 2017-10-08T01:53:53+00:00 April 17th, 2017|

California Business Licenses and Permits: Which Ones Do You Need?

California Business Licenses and Permits: Which Ones Do You Need? Nearly every business needs some kind of business license or permit to operate. Which licenses you need may vary depending on your location, type of business, products sold, customer base, and more. In California, the state government runs some [...]

By | 2017-10-08T01:52:32+00:00 April 14th, 2017|

The Advantages of Limited Partnerships

The Advantages of Limited Partnerships Limited partnerships offer many advantages over other entity types, especially for businesses in which one partner wants to provide funding but not run the business on a daily basis. A limited partnership differs from a standard partnership because it has at least one general [...]

By | 2017-10-08T01:50:57+00:00 April 12th, 2017|

Do You Owe a Duty of Care to Investors in Your Business?

Do You Owe a Duty of Care to Investors in Your Business? Many California business owners owe duties of care to their investors under California law. Generally, the duty of care requires business owners to act in good faith and in the best interests of the business. It is [...]

By | 2017-10-08T01:49:32+00:00 April 10th, 2017|

Professional Corporations in California

Professional Corporations in California Californians employed as professionals and seeking to start a business should consider incorporating as professional corporations. You may have seen the initials “P.C.” at the end of a doctor’s office or lawyer’s firm name, which indicates that the firm is a professional corporation. Professional corporations [...]

By | 2017-10-08T01:48:09+00:00 April 7th, 2017|

California Startups Must Disclose Financial Information to Shareholders

California Startups Must Disclose Financial Information to Shareholders Many startups organized as private corporations keep the value of corporate shares a well-protected secret. Telling the public that share values have soared in recent years or that they recently dropped after a new product announcement could greatly affect a company’s [...]

By | 2017-10-08T01:46:37+00:00 April 5th, 2017|

Introduction to Privacy and Business Ownership

Introduction to Privacy and Business Ownership Many first-time business owners worry about the privacy of their personal information. For a savvy entrepreneur, running a business does not have to mean disclosing everything about your life to the public. Instead, use a variety of legal, financial, and common sense strategies [...]

By | 2017-10-08T01:45:16+00:00 April 3rd, 2017|

Payment of Finder’s Fees for Securities Sales in California

Payment of Finder’s Fees for Securities Sales in California California’s new law permitting payment of finder’s fees to middlemen in securities purchases creates new business incentives within the state. However, the law contradicts a long-held Securities and Exchange Commission policy against finder’s fees. Essentially, California has legalized payment of [...]

By | 2017-10-08T01:36:20+00:00 March 31st, 2017|

Employment Contracts for Savvy Techies Who Want to Hit It Big

Employment Contracts for Savvy Techies Who Want to Hit It Big Technology companies who want to make it in an already cutthroat industry can gain an edge by learning what to look for and what to include in employment contracts. Negotiating salary and starting a new position mean plenty [...]

By | 2017-10-08T01:34:16+00:00 March 29th, 2017|

How Can I Prevent Employees from Leaking Ideas?

How Can I Prevent Employees from Leaking Ideas? “Loose lips sink ships.” This common saying describes the fate of businesses whose employees, either inadvertently or on purpose, share ideas with others without permission. Competitors may learn of the ideas or even pay employees for them and then use them [...]

By | 2017-10-08T01:32:54+00:00 March 27th, 2017|

My Investor Is Being Too Hands On. Is There Anything I Can Do?

My Investor Is Being Too Hands On. Is There Anything I Can Do? Investors getting very involved in the business can cause problems for business owners who want to retain control. On one hand, without the investor, the business would not have the money to fund its operations. On [...]

By | 2017-10-08T01:31:07+00:00 March 24th, 2017|

What to Promise Investors and What to Keep to Yourself If You Want to Stay Out of Court

What to Promise Investors and What to Keep to Yourself If You Want to Stay Out of Court Promoting your business to investors could land you in court if you run afoul of the detailed and complicated California and federal laws surrounding sale of securities. This post focuses on [...]

By | 2017-10-08T01:29:39+00:00 March 22nd, 2017|

One of My Startup Partners Wants Out – and Wants His Investment Back. What Do I Do?

One of My Startup Partners Wants Out - and Wants His Investment Back. What Do I Do? Learning that your startup partner no longer wants to work with you and wants back the money they invested in the startup is not easy. It is also often not easy to [...]

By | 2017-10-08T01:28:00+00:00 March 20th, 2017|

I Don’t Need a Lawyer to Start a Corporation – Or Do I?

I Don’t Need a Lawyer to Start a Corporation - Or Do I? Many new business owners start out forming a corporation with the idea that they can do all the paperwork themselves and save on legal fees. It is true that the California Secretary of State provides a [...]

By | 2017-10-08T01:26:20+00:00 March 17th, 2017|

Changing Your Startup’s Product Midway Through – and How It Could Cause Legal Troubles

Changing Your Startup’s Product Midway Through - and How It Could Cause Legal Troubles If you work for a startup, you know that your target audience’s needs can change on short notice, and so you may need to adapt your product or service to fit the market. You may [...]

By | 2017-10-08T01:24:17+00:00 March 15th, 2017|

Examples of Biotechnology Agreements and Why They are Important

Examples of Biotechnology Agreements and Why They are Important The growing biotechnology industry can be a minefield of legal issues for scientists and the companies they start, seeking to protect their investments and grow their business. One common topic that every biotech founder should consider is how to prevent [...]

By | 2017-10-08T01:22:41+00:00 March 13th, 2017|

What Is the Difference Between Federal Securities Laws and California Securities Laws, and How Do They Apply to Me?

What Is the Difference Between Federal Securities Laws and California Securities Laws, and How Do They Apply to Me? Both the state of California and the federal government have laws about securities on the books, but the two sets of laws differ significantly. Federal and California securities laws cover [...]

By | 2017-10-08T01:21:12+00:00 March 10th, 2017|

Protect Your Business from Data Security Breaches

Protect Your Business from Data Security Breaches After hearing about the many data security breaches in the past few years, you may have wondered how breaches can be prevented, either at a business you own or the ones you patronize. Though hackers are becoming more sophisticated, smaller businesses need [...]

By | 2017-10-08T01:19:46+00:00 March 8th, 2017|

Beginning a Business Relationship with a Vendor

Beginning a Business Relationship with a Vendor In the rush to court a new vendor, companies may be tempted to quickly sign a standard form agreement and begin work immediately. If you find yourself caught up in the rush, take a step back, properly investigate, and negotiate your relationship [...]

By | 2017-10-08T01:18:13+00:00 March 6th, 2017|

Fair Use of Copyrighted Material

Fair Use of Copyrighted Material Generally, the owner of a copyrighted work has the exclusive right to reproduce, distribute, perform, and display the work, and to prepare derivative works based on it. 17 U.S.C. § 106. Fair use is a broad exception to this exclusive right. It allows the [...]

By | 2017-10-08T01:16:46+00:00 March 3rd, 2017|

Director and Officer Liability in the Corporation

Director and Officer Liability in the Corporation Corporations shield their directors and officers from liability for corporate actions, unless a director or officer personally directed or participated in tortious conduct. See, e.g., Frances T. v. Village Green Owners Ass’n. (1986) 42 Cal.3d 490, 503-504. The term tortious conduct refers to [...]

By | 2017-10-08T01:15:22+00:00 March 1st, 2017|

What Are the Most Important Contract Terms for Tech Companies?

What Are the Most Important Contract Terms for Tech Companies? Technology companies, especially those with active websites or e-retail portals, will want to have a well-drafted set of contracts in place to keep their business running smoothly from a legal perspective. These contracts cover a variety of topics: terms [...]

By | 2017-10-08T01:13:45+00:00 February 27th, 2017|

California Law on Non-Competition Agreements

California Law on Non-Competition Agreements In California, both a state statute and numerous court decisions say that non-competition agreements are not enforceable, and delving into the reasons why can help business owners understand how to work around needing them. The term “non-competition agreement” generally refers to a contract between [...]

By | 2017-10-08T01:12:18+00:00 February 24th, 2017|

How Does the San Diego City Business Tax Affect Me?

How Does the San Diego City Business Tax Affect Me? Businesses operating in the city of San Diego, California, must obtain a business tax certificate and pay the city business tax. San Diego Municipal Code § 31.0101, et seq. The law applies to any person engaging in a business [...]

By | 2017-10-08T01:10:57+00:00 February 22nd, 2017|

Out-of-State Corporations in California

Out-of-State Corporations in California Corporations that are incorporated in another state and are doing business in California should be mindful of compliance with California law. For example, out-of-state corporations must ensure they are properly registered to do business, that they familiarize themselves with laws regarding company employees working in [...]

By | 2017-10-08T01:09:26+00:00 February 20th, 2017|

Can I Use Electronic Signatures on a Contract?

Can I Use Electronic Signatures on a Contract? Whether you can use electronic signatures to bind parties to a legally enforceable contract in California depends on the parties’ agreement and the method of signature. Be careful to fulfill the below requirements, or a court might find that the agreement [...]

By | 2017-10-08T01:07:56+00:00 February 17th, 2017|

Insurance Basics for New Business Owners

Insurance Basics for New Business Owners The current litigious business climate makes obtaining appropriate insurance a must for new business owners. Insurance can help cover the costs of a burglary, an injury to an employee, or some lawsuits, among other liability situations. Paying the insurance premiums now does not [...]

By | 2017-10-08T01:06:27+00:00 February 15th, 2017|

How to Protect Your Rights as a Landlord in a California Commercial Lease

How to Protect Your Rights as a Landlord in a California Commercial Lease While many may be familiar with residential landlord-tenant law, they may not realize that there is a significant difference between what is permissible in the residential lease compared to what is permissible in the commercial lease. [...]

By | 2017-10-08T01:03:41+00:00 January 29th, 2017|

What is a “Unilateral Contract”?

What is a “Unilateral Contract”? Ordinarily a contract is defined as an agreement between two or more parties “which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, subject matter, a legal consideration, mutuality of agreement and mutuality of obligations.” Black’s Law Dictionary 291-292 [...]

By | 2017-10-08T01:01:24+00:00 January 29th, 2017|

San Diego’s New Minimum Wage Ordinance

San Diego’s New Minimum Wage Ordinance On July 28, 2014 the City of San Diego issued a Press Release from the office of the Council President, Todd Gloria, announcing an increase in the City’s minimum wage and providing sick leave for worker’s within the City. Press Release, San Diego Increases [...]

By | 2017-10-08T01:00:09+00:00 January 29th, 2017|

I used crowdfunding for my startup. What happens if my business fails?

I used crowdfunding for my startup. What happens if my business fails? So you have a really cool idea for a startup, but you don’t have the money you need to launch it. Your last $5 paid for two slices of pizza last night. You’re certain your product will [...]

By | 2017-10-08T00:58:35+00:00 December 15th, 2016|

A competitor is interfering with my business. What can I do?

A competitor is interfering with my business. What can I do? You have an idea for a tech startup and the software you’re developing is awesome. Founded along with a college buddy, the company grows quickly once you both graduate. You incorporate and secure an investor. You use some [...]

By | 2017-10-08T00:56:56+00:00 December 13th, 2016|

When can I revoke an offer in California?

When can I revoke an offer in California? Most people, even the savviest entrepreneurs, second-guess their decisions every now and then. Especially when it involves money. The whole you-have-to-spend-money-to-make-money adage is likely true for startups who incorporate and ultimately put a product out on the market. But an entrepreneur [...]

By | 2017-10-08T00:55:42+00:00 December 8th, 2016|

The defense of duress – what is it?

The Defense of Duress - What is it? The defense of duress is not unusual in criminal cases. It’s when a defendant says he or she was forced to commit a crime by another person. In criminal law, an offense is sometimes excused if a jury believes the defendant [...]

By | 2017-10-08T00:54:19+00:00 December 6th, 2016|

San Diego’s minimum wage increases – what you need to know

San Diego's Minimum Wage Increases: What You Need to Know In March, the California Legislature approved a plan to raise the state’s minimum wage to $15 per hour by January 1, 2022. The move made the state the first in the country to significantly boost its pay and encouraged [...]

By | 2017-10-08T00:52:29+00:00 November 29th, 2016|

Better business entity: sole proprietorship or corporation?

Which is the better business entity: sole proprietorship or corporation? Entrepreneurship is an exciting journey. It’s a dream put to action on your own terms. The possibilities feel endless — and they are. That being said, a lot goes into starting your business. Entrepreneurs early on should think about [...]

By | 2017-10-08T00:50:40+00:00 November 22nd, 2016|

How long will it take to form my corporation?

How long will it take to form my corporation? Entrepreneurs, including those who have created a tech startup in the state of California, should consider forming a corporation as their business grows. But before you get started, it’s important to understand the timeline and process involved. Let’s say, for [...]

By | 2017-10-08T00:48:59+00:00 November 14th, 2016|

Why is my Landlord Asking me to Sign an Attornment Agreement?

Why is my Landlord Asking me to Sign an Attornment Agreement? Before you can understand why you are being asked by your landlord to sign an “attornment agreement,” you must understand what attornment agreement is. Black’s Law Dictionary defines the term “attornment” by reference to “feudal and old English law,” as [...]

By | 2017-10-08T00:47:31+00:00 October 31st, 2016|

Can I Get Punitive Damages for Breach of Contract?

Can I Get Punitive Damages for Breach of Contract? Black’s Law Dictionary defines the terms “[e]xemplary or punitive damages” as “damages on an increased scale, awarded to the plaintiff over and above what will barely compensate him for his property loss, where the wrong done to him was aggravated by circumstances [...]

By | 2017-10-08T00:46:09+00:00 October 26th, 2016|

Can I Assign my Contract in California?

Can I Assign my Contract in California? The simple answer is, as it is in response to many questions in the law, it depends. It first depends upon how the term “assign” is used. In McCown v. Spencer (1970) 8 Cal.App.3d 216, 225, 87 Cal.Rptr. 213, the California Courts of Appeal [...]

By | 2017-10-08T00:44:59+00:00 October 24th, 2016|

What Can I Do if my Vendor Tells Me He Won’t Perform His Obligations?

What Can I Do if my Vendor Tells Me He Won’t Perform His Obligations? You entered into a requirements contract (see https://sdcorporatelaw.com/business-newsletter/what-is-a-requirements-contract/) with your vendor to purchase 500 widgets per month for the next 24 months. In month 14 of your contract, your vendor calls and tells you that beginning [...]

By | 2017-10-08T00:43:04+00:00 October 21st, 2016|

What Kind of “Writing” Satisfies the Statute of Frauds?

What Kind of “Writing” Satisfies the Statute of Frauds? California Civil Code Section 1624, commonly referred to as the Statute of Frauds, provides that certain “contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or the [...]

By | 2017-10-08T00:41:43+00:00 October 19th, 2016|

Do I Have to Incorporate my Architecture Firm?

Do I Have to Incorporate my Architecture Firm? Like most business people, architects start practicing their trade without giving much thought to how they might best take advantage of the many forms of business available to them. They generally hang out a shingle (if they are not working for [...]

By | 2017-10-08T00:36:48+00:00 October 17th, 2016|

My Contract has Been Breached – Do I Have to Perform my Promises?

My Contract has Been Breached – Do I Have to Perform my Promises? California Civil Code Section 1440 provides, “[i]f a party to an obligation gives notice to another, before the latter is in default, that he will not perform the same upon his part, and does not retract such [...]

By | 2017-10-08T00:35:25+00:00 October 14th, 2016|

What is “Consideration”?

What is “Consideration”? We’ve all signed countless contracts in the past for a variety of reasons and most of them contain, usually in the first few paragraphs, the phrase “for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged.” For the most part, we generally pay [...]

By | 2017-10-08T00:33:43+00:00 October 6th, 2016|

Do I Need to Register my Business With the California Employment Development Department?

Do I Need to Register my Business With the California Employment Development Department? “The Employment Development Department (EDD) administers California’s payroll taxes, including Unemployment Insurance, Employment Training Tax, State Disability Insurance (including Paid Family Leave), and California Personal Income Tax withholding. Employers conducting business in California are required to register [...]

By | 2017-10-08T00:32:30+00:00 August 12th, 2016|

I Don’t Want to Pay for Worker’s Comp – Do I Need It?

I Don’t Want to Pay for Worker’s Comp – Do I Need It? Frequently those contemplating hiring employees ask whether they must obtain and pay for worker’s compensation insurance (sometimes referred to as “worker’s comp”) for their employees. Those same people sometimes believe that they do not need to [...]

By | 2017-10-08T00:31:01+00:00 August 10th, 2016|

What is California’s Victims of Corporate Fraud Compensation Fund?

What is California’s Victims of Corporate Fraud Compensation Fund? The Victims of Corporate Fraud Compensation Fund (“VCFCF”) is governed by California Corporations Code Sections 2280, et seq. and California Code of Regulations, title 2, division 7, chapter 12, sections 22500 through 22507. The fund was specifically created to provide “limited restitution to [...]

By | 2017-10-08T00:15:07+00:00 August 8th, 2016|

Tips for Forming the California Joint Venture

Tips for Forming the California Joint Venture A “joint venture” has been defined as, “[a] legal entity in the nature of a partnership engaged in the joint prosecution of a particular transaction for mutual profit…” A one-time grouping of two or more persons in a business undertaking. Unlike a [...]

By | 2017-10-08T00:13:33+00:00 August 5th, 2016|

What is a Registered Agent?

What is a Registered Agent? When forming business entities, the term “registered agent” is frequently used, and there are many registered agent services available for hire in each state. So what does a registered agent do? In California, the term generally refers to the “registered agent for service of [...]

By | 2017-10-08T00:11:52+00:00 August 3rd, 2016|