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How California Courts Interpret Contracts: What is the “Construction Against Drafter” Doctrine?

How California Courts Interpret Contracts: What is the “Construction Against Drafter” Doctrine? Recently, we wrote a quick description of how California courts interpret contracts. In this follow up article, we discuss the concept of "construction against drafter." This is the final step used to interpret contracts, or the "tie-breaker," [...]

By | 2018-05-17T16:22:41+00:00 May 27th, 2018|

What is a Third-Party Beneficiary of a San Diego Contract?

What is a Third-Party Beneficiary of a San Diego Contract? In general, if there is a dispute about a contract, the only parties that are able to file a lawsuit for breach of contract are the parties that entered into the contract. Occasionally, however, there is a so-called "third-party [...]

By | 2018-05-17T15:52:12+00:00 May 26th, 2018|

How California Courts Interpret Contracts

How California Courts Interpret Contracts It can be said that all San Diego and California businesses "run on contracts." This article discusses the way(s) in which California courts interpret contracts if there is a dispute between the parties. This is important because, when drafting a contract, it is crucial [...]

By | 2018-05-17T15:25:49+00:00 May 25th, 2018|

San Diego Businesses: What is the Work-Made-for-Hire Doctrine?

San Diego Businesses: What is the Work-Made-for-Hire Doctrine? The doctrine of "work-made-for-hire" relates to copyrights. In general, the legal rights that exist by virtue of copyright law lodge and vest in the author or authors of any creative work and those rights vest at the moment of creation. See [...]

By | 2018-05-17T14:57:47+00:00 May 24th, 2018|

Do San Diego Home-Based Businesses Need to Use a Corporate Entity?

Do San Diego Home-Based Businesses Need to Use a Corporate Entity? Many people work from home and own home-based businesses. Back in 2013, Forbes Magazine stated that more than half of Americans work for small business and over 50% of those are home-based. See here. Since 2013, even more [...]

By | 2018-05-17T14:34:48+00:00 May 23rd, 2018|

Top Reason for Having Company Policy for Employee Use of Company Resources

Top Reason for Having Company Policy for Employee Use of Company Resources Employee use of company equipment, supplies, and resources is very common; it can involve something as simple as worker using his/her assigned computer to send personal emails and/or "surf the net." That sort of behavior is lost [...]

By | 2018-05-17T14:18:50+00:00 May 22nd, 2018|

Can an Exchange of Emails be a “Contract?”

Can an Exchange of Emails be a "Contract?" As we have discussed here on this blog occasionally, there are significant legal issues with respect to how contracts are formed. There are many legal requirements for formation and enforceability. For example, there must be adequate consideration -- value given and [...]

By | 2018-05-17T13:12:28+00:00 May 21st, 2018|

San Diego Employment Contracts: Do Businesses Need Morality Clauses?

San Diego Employment Contracts: Do Businesses Need Morality Clauses? Morality clauses are standard provisions in many types of contracts including endorsement, sports, and entertainment contracts. Such clauses generally give one party to the contract the right to terminate if the other party behaves in some manner that is immoral, [...]

By | 2018-05-17T12:50:51+00:00 May 20th, 2018|

Ensuring Your San Diego Business Owns Any Employee-Created IP

Ensuring Your San Diego Business Owns Any Employee-Created IP Intellectual property ("IP") is commercially valuable to all San Diego businesses. IP includes assets like trade secrets, copyrights, and inventions and, under proper circumstances, legally protectable IP can include items like customer lists and business methods. When it comes to [...]

By | 2018-05-10T15:52:47+00:00 May 19th, 2018|

Choice of Law Clauses in San Diego Business Contracts (Part II)

Choice of Law Clauses in San Diego Business Contracts (Part II) In part I of this series, we discussed how California courts apply the concept of choice of law with respect to a factual/legal situation where the parties themselves did not otherwise specify which law they wanted applied. As [...]

By | 2018-05-10T15:16:27+00:00 May 18th, 2018|

Choice of Law for San Diego Businesses (Part I)

Choice of Law for San Diego Businesses (Part I) If you are running a business in San Diego, it may be reasonable to assume that California law will be applied to all of your contracts and to any case or litigation that is filed based on tort. As an [...]

By | 2018-05-10T14:44:00+00:00 May 17th, 2018|

Minimizing the Risk That Your San Diego Business Will be Held Liable for Crimes of Your Employees

Minimizing the Risk That Your San Diego Business Will be Held Liable for Crimes of Your Employees If you are running a business in San Diego or California, your business CAN be held liable for crimes committed by an employee. Under some circumstances, your business can be held directly [...]

By | 2018-05-10T14:23:15+00:00 May 16th, 2018|

Avoiding Employee Lawsuits With a Good Employee Handbook

Avoiding Employee Lawsuits With a Good Employee Handbook Every San Diego and California business needs a good employee handbook ("EH") for their staff and employees. Finding a generic EH on the internet is not good enough; you need a competent and knowledgeable corporate attorney to draft an EH that [...]

By | 2018-05-10T13:52:13+00:00 May 15th, 2018|

Buy-Sell Agreements Should be Reviewed Annually

Buy-Sell Agreements Should be Reviewed Annually If you are running a San Diego partnership, limited partnership, closely-held corporation or an LLC, it is important that you have a well-crafted buy-sell agreement. If you do not have one, it is time to have one written. A good San Diego corporate [...]

By | 2018-05-10T13:23:05+00:00 May 14th, 2018|

Thoughts Concerning Force Majeure Clauses

Thoughts Concerning Force Majeure Clauses Many San Diego and California business contracts contain what are called "force majeure" clauses. These generally absolve or excuse performance if there is some event that occurs outside of the party's control like war or an "act of god." A good San Diego corporate [...]

By | 2018-05-10T12:53:46+00:00 May 13th, 2018|

How California Contracts can be Held Void as Against Public Policy

How California Contracts can be Held Void as Against Public Policy In general, as long as San Diego and California contracts meet the requirements with respect to being properly formed, such are enforceable in California courts. However, there are some circumstances in which courts will refuse to enforce a [...]

By | 2018-05-10T12:05:13+00:00 May 12th, 2018|

Master Agreements versus One-at-a-Time Agreements

Master Agreements versus One-at-a-Time Agreements When your San Diego or California business has an ongoing relationship with another business -- for services or for product -- you have a few choices in terms of how to set up the contracts. Probably the most common is a series of one-at-a-time [...]

By | 2018-05-02T15:26:20+00:00 May 11th, 2018|

Drafting a Business Plan to Pitch Investors

Drafting a Business Plan to Pitch Investors If your San Diego or California startup is seeking to attract venture capital, you are going to need a good written business plan to pitch to your potential investors. A business plan is the written version of all of the good and [...]

By | 2018-05-02T14:54:11+00:00 May 10th, 2018|

The Duty of Care for a Corporation Versus a Limited Liability Company

The Duty of Care for a Corporation Versus a Limited Liability Company There are many reasons why you might want to form a San Diego limited liability company instead of forming a San Diego corporation. Among those include: LLCs require fewer corporate formalities like annual shareholder meetings, etc. LLCs [...]

By | 2018-05-02T14:39:37+00:00 May 9th, 2018|

How Does the Secretary of State Determine Business Name Availability?

How Does the Secretary of State Determine Business Name Availability? As many know, when you form a corporation here in San Diego or anywhere in California, you must specify the name of the corporation (or LLC or Limited Partnership). According to Cal. Corp. Code, § 201(b), a business name [...]

By | 2018-05-02T14:16:03+00:00 May 8th, 2018|

Employers are Responsible for Their Employees’ Negligence and Wrongful Acts

Employers are Responsible for Their Employees' Negligence and Wrongful Acts If your San Diego or California business has employees, then your company is responsible for the accidents, mistakes, and bad behavior of your employees. The legal origin of this principle is the doctrine of respondeat superior. Here is a [...]

By | 2018-05-02T14:01:47+00:00 May 7th, 2018|

Tips for Avoiding Unconscionability in Your San Diego Business Contracts

Tips for Avoiding Unconscionability in Your San Diego Business Contracts Here in San Diego and in California, there are a few circumstances in which courts will not enforce a contract or contract provisions. One such circumstance is when the contract is deemed to be "unconscionable." Here is a quick [...]

By | 2018-05-02T13:41:57+00:00 May 6th, 2018|

Using Business Contracts to Limit Possible Damages Recoverable in Litigation

Using Business Contracts to Limit Possible Damages Recoverable in Litigation Under California law, it is possible to use contract language to limit your San Diego business's liability for damages in the event of future litigation. In general, these are called "Limitation on Damages" clauses and, with exceptions, such provisions [...]

By | 2018-05-02T12:56:16+00:00 May 5th, 2018|

Sexual Harassment Lessons From a New Maryland Law

Sexual Harassment Lessons From a New Maryland Law San Diego and California businesses are aware that sexual harassment is not allowed and is not to be tolerated in California workplaces. The #MeToo movement has highlighted the issue and among the goals of the movement is to remove the cloud [...]

By | 2018-05-02T11:52:17+00:00 May 4th, 2018|

Some Tips on Getting Out of a “Bad” Contract

Some Tips on Getting Out of a "Bad" Contract In general, San Diego and California businesses want to honor their contracts. But, maybe you ended up signing a "bad" contract. Every business does it at some point; it is nearly inevitable. The contract can be bad for any number [...]

By | 2018-05-02T11:55:10+00:00 May 3rd, 2018|

“No Waiver” Clauses in San Diego Business Contracts

"No Waiver" Clauses in San Diego Business Contracts Many sophisticated business contracts in San Diego and California contain what are called "no waiver" clauses. The intent of these clauses is to prevent an accidental or inadvertent waiver of contractual rights in the event of breach of contract. Usually, “no [...]

By | 2018-04-26T15:13:13+00:00 May 2nd, 2018|

“At-Will” Employment in San Diego

"At-Will" Employment in San Diego In San Diego and California, with some exceptions, all employees are "at-will" employees that can be fired "for cause" or "for no reason at all." One exception is if your San Diego business or company has agreed to an employment contract with an employee [...]

By | 2018-04-26T14:45:01+00:00 May 1st, 2018|

Do San Diego Business Contracts Now Need to Conform to the Three Gender Options?

Do San Diego Business Contracts Now Need to Conform to the Three Gender Options? In October 2017, California Governor Jerry Brown signed the Gender Recognition Act. This Act adds "non-binary" as a choice for California residents when required or asked to designate a gender for state documents like a [...]

By | 2018-04-26T14:24:58+00:00 April 30th, 2018|

What is “Piercing the Corporate Veil?”

What is "Piercing the Corporate Veil?" If you a shareholder of a San Diego or California corporation, generally speaking, the corporate entity will shield you from personal liability for the business debts and obligations of the corporation. However, under some circumstances, the courts will not allow the corporation to [...]

By | 2018-04-26T13:39:29+00:00 April 29th, 2018|

San Diego Corporate Law: 5% Interest in Restaurant Not a “Security”

San Diego Corporate Law: 5% Interest in Restaurant Not a "Security" As we have written here at San Diego Corporate Law, if you are selling and/or offering "securities" in California, you must comply with both federal and California securities laws -- the Corporate Securities Law of 1968 (Corp. Code, [...]

By | 2018-04-19T15:53:07+00:00 April 28th, 2018|

San Diego Employee Non-Disclosure Agreements: What Should They Contain?

San Diego Employee Non-Disclosure Agreements: What Should They Contain? The purpose of San Diego and California non-disclosure agreements ("NDA") is to protect your business and its commercially valuable trade secrets. Trade secrets and confidential information are often the key to keeping and expanding your company's market share. We have [...]

By | 2018-04-19T15:18:17+00:00 April 27th, 2018|

Medical Corporations: Company Policies May Help Avoid Malpractice Lawsuits

Medical Corporations: Company Policies May Help Avoid Malpractice Lawsuits Every San Diego and California physician and healthcare provider must carry malpractice insurance. The same is true for any medical corporation under which the physicians and healthcare providers offer services. However, malpractice lawsuits are bad for business even if there [...]

By | 2018-04-19T14:43:48+00:00 April 26th, 2018|

What is a Certificate of Qualification?

What is a Certificate of Qualification? If you are a San Diego corporation, to become incorporated, you had to file and obtain articles of incorporation from the California Secretary of State. You also have annual filing and tax requirements with the California Franchise Tax Board. By contrast, if you [...]

By | 2018-04-19T13:31:37+00:00 April 25th, 2018|

Shareholder Derivative Actions (Part III): “Demand Futility” Doctrine

Shareholder Derivative Actions (Part III): "Demand Futility" Doctrine As we discussed in Part I of this series, shareholders of San Diego corporations can bring lawsuits on behalf of the corporation against other shareholders and against members of the board of directors. These are called shareholder derivative actions. As we [...]

By | 2018-04-19T12:48:09+00:00 April 24th, 2018|

Shareholder Derivative Actions (Part II): What Happens After the Demand Letter?

Shareholder Derivative Actions (Part II): What Happens After the Demand Letter? As we discussed in Part I of this series, shareholders of San Diego and California corporations can bring derivative lawsuits against members of the board of directors. Technically, these are lawsuits filed on behalf of the corporation seeking [...]

By | 2018-04-19T12:33:40+00:00 April 23rd, 2018|

Shareholder Derivative Actions (Part I): The “Demand” Requirement

Shareholder Derivative Actions (Part I): The "Demand" Requirement Under California law, San Diego corporations have a duty to take actions that are in the best interest of the company and the investors. Failure by the board to do this will lead to litigation, in particular, shareholder derivative actions. However, [...]

By | 2018-04-19T12:07:37+00:00 April 22nd, 2018|

Non-Solicitation and Non-Acceptance of Business Clauses are Not Enforceable in San Diego

Non-Solicitation and Non-Acceptance of Business Clauses are Not Enforceable in San Diego As many San Diego and California businesses know, non-compete agreements are not enforceable in California. That is, except for a few limited circumstances, you cannot enforce any agreement by which an employee agrees not to compete against [...]

By | 2018-04-12T15:47:58+00:00 April 21st, 2018|

San Diego Medical Corporations: What is the Doctrine of Fair Procedure?

San Diego Medical Corporations: What is the Doctrine of Fair Procedure? In San Diego and in California generally, there is a judge-created common law legal principle called the "doctrine of fair procedure." In general, the doctrine protects an individual, like a physician, from being fired, excluded, or expelled in [...]

By | 2018-04-12T15:15:47+00:00 April 20th, 2018|

Using San Diego Affiliated Companies to Protect Intellectual Property

Using San Diego Affiliated Companies to Protect Intellectual Property Under some circumstances, there is value to using or creating an affiliated company to protect intellectual property from risks associated with other parts of an ongoing business. Under California law, the same group of individuals or entities can own more [...]

By | 2018-04-12T14:45:33+00:00 April 19th, 2018|

What is an Integrated or Partially-Integrated Contract? Merger Clauses Part II

What is an Integrated or Partially-Integrated Contract? Merger Clauses Part II When dealing with complex San Diego business contracts like business purchase agreements, it is not uncommon for there to be several drafts and re-drafts of the final contract. As we discussed previously on this blog, a well-drafted business [...]

By | 2018-04-12T13:29:39+00:00 April 18th, 2018|

How Insurance Can Make a Buy-Sell Agreement “Easy” for Death or Disability

How Insurance Can Make a Buy-Sell Agreement "Easy" for Death or Disability For small San Diego and California businesses, it is important that the owners agree early in the process to a buy-sell agreement. This applies whether you are running your business as a general partnership, a corporation, a [...]

By | 2018-04-12T13:02:54+00:00 April 17th, 2018|

Can I Still be Liable for Rent if I Vacate My San Diego Commercial Space Early?

Can I Still be Liable for Rent if I Vacate My San Diego Commercial Space Early? Under California law, a commercial tenant who breaks a commercial lease by vacating the space early can be held liable by the landlord for unpaid rent. Commercial tenants should remember that commercial leases [...]

By | 2018-04-12T12:29:32+00:00 April 16th, 2018|

Confidentiality Clauses in San Diego Business Contracts (Part I)

Confidentiality Clauses in San Diego Business Contracts (Part I) It is not uncommon to find confidentiality clauses in business contracts. Such clauses come in two varieties - confidentiality with respect the agreement itself and/or the contents of the agreement, and confidentiality with respect to commercial information and trade secrets [...]

By | 2018-04-12T11:55:38+00:00 April 15th, 2018|

Non-Compete Agreements in San Diego: When are They Valid?

Non-Compete Agreements in San Diego: When are They Valid? In general, under California law, a current employer cannot restrict an employee from leaving and taking another job, even with a competitor. In many states, employers are allowed use so-called "Restrictive Covenants" or a "Non-Compete Agreements" to prevent an employee [...]

By | 2018-04-12T11:27:42+00:00 April 14th, 2018|

Franchise Provisions to Avoid in San Diego

Franchise Provisions to Avoid in San Diego Are you thinking of buying a franchise? We here at San Diego Corporate Law have noticed a strong uptick in franchise companies advertising for new franchisees. Starting up a new business can be exciting and we certainly encourage the entrepreneurial spirit. We [...]

By | 2018-04-05T15:19:03+00:00 April 13th, 2018|

Common Places to Find a Buyer for Your San Diego Business

Common Places to Find a Buyer for Your San Diego Business Are you in the market to sell your San Diego business? Finding a buyer can be one of the more complicated challenges. You are definitely going to need a trusted and experienced corporate lawyer to help you with [...]

By | 2018-04-05T14:55:08+00:00 April 12th, 2018|

San Diego Corporate Formalities: Proper Notice of Meetings of Shareholders and Directors

San Diego Corporate Formalities: Proper Notice of Meetings of Shareholders and Directors Under California law, corporations are required to have an annual meeting of shareholders and to hold regular meetings of the board of directors. In this article, we discuss the importance of proper notice of the respective meetings. [...]

By | 2018-04-05T14:11:20+00:00 April 11th, 2018|

What are “Liquidated Damages” in San Diego?

What are "Liquidated Damages" in San Diego? A provision for liquidated damages is a way to specify damages in the absence or inability of actually calculating damages, or when such damages would be difficult to calculate. The advice and counsel of a good corporate lawyer is needed if you [...]

By | 2018-04-05T13:13:31+00:00 April 10th, 2018|

When is the Right Time to Convert From Sole Proprietorship to a Corporation?

When is the Right Time to Convert From Sole Proprietorship to a Corporation? Research and observation shows that, when they succeed, businesses have certain natural stages of growth. Many a San Diego business might start off as a sole proprietorship. That is, the business is/was just you (with the [...]

By | 2018-04-05T12:13:56+00:00 April 9th, 2018|

San Diego General Partnerships: What Happens if a Partner Leaves?

San Diego General Partnerships: What Happens if a Partner Leaves? In San Diego, a general partnership can be formal or informal. Under California law, in simplest terms, a partnership exists if two or more persons or entities jointly own a business for the purpose of making money. If the [...]

By | 2018-04-05T11:35:19+00:00 April 8th, 2018|

Top Five Mistakes to Avoid When Starting Your New San Diego Business

Top Five Mistakes to Avoid When Starting Your New San Diego Business Congratulations! You have made the decision to finally start your own San Diego business - maybe on your own or with some good friends or trusted colleagues. This is exciting, but of course, risky. We here at [...]

By | 2018-04-05T15:47:04+00:00 April 7th, 2018|

San Diego Corporate Formalities: Annual Shareholders’ Meetings

San Diego Corporate Formalities: Annual Shareholders' Meetings In San Diego and elsewhere in California, corporations are required to have an annual meeting of shareholders. For small companies, it may seem pointless and a waste of time. However, complying with corporate formalities is important. Remember that one of the main [...]

By | 2018-03-29T14:17:43+00:00 April 6th, 2018|

Closing a San Diego LLC

Closing a San Diego LLC Sometimes when you set up a new San Diego Limited Liability Company ("LLC") with the expectation of going into business, something goes wrong. Maybe the deal falls through, or during due diligence, something is discovered that makes the deal unworkable or shows that the [...]

By | 2018-03-29T13:50:14+00:00 April 5th, 2018|

Tips for Picking a Good Company Name: Lessons From Trademark Law

Tips for Picking a Good Company Name: Lessons From Trademark Law One of the trickier aspects of starting a new San Diego business is picking a good company name. As we discuss below, it is generally a bad idea to pick YOUR personal or family name as the name [...]

By | 2018-03-29T13:26:44+00:00 April 4th, 2018|

What is a Voidable Conveyance? (Part I)

What is a Voidable Conveyance? (Part I) In general, your San Diego business must honor its payment obligations to its creditors. Creditors are, of course, lenders and financial institutions, but also can be your landlord, suppliers, and others to whom payment is due. In general, if your business fails [...]

By | 2018-03-29T12:58:58+00:00 April 3rd, 2018|

Should Your San Diego LLC be Member-Managed or Manager-Managed?

Should Your San Diego LLC be Member-Managed or Manager-Managed? Under the California Corp. Code, § 17701 et seq., when you form a Limited Liability Company (“LLC”) to run your San Diego business, you choose how the LLC is managed. The three choices are: Single-member LLC Member-managed -- managed by [...]

By | 2018-03-29T12:32:58+00:00 April 2nd, 2018|

What is a UCC Lien Filing?

What is a UCC Lien Filing? If your San Diego business is contemplating a small business loan or a business line of credit or some similar form of general financing, then your lender will require some sort of collateral. In a residential housing example, when you take out a [...]

By | 2018-03-22T16:06:07+00:00 April 1st, 2018|

San Diego Businesses: Tips for Avoiding Litigation

San Diego Businesses: Tips for Avoiding Litigation Litigation is expensive and time-consuming. It is costly in terms of legal bills, litigation costs, and lost productivity. Furthermore, if there is an adverse result, then there are the costs of paying the judgment. Litigation can kill a startup and seriously undermine [...]

By | 2018-03-22T15:39:41+00:00 March 31st, 2018|

Five Advantages of Using Trade Secret Law to Protect Your Intellectual Property

Five Advantages of Using Trade Secret Law to Protect Your Intellectual Property Your San Diego business owns a lot of intellectual property ("IP") even if you do not really think of some of your assets as IP. As we have discussed before, many aspects of businesses can be legally [...]

By | 2018-03-22T15:10:40+00:00 March 30th, 2018|

What is a “501(c)(3) Corporation?”

What is a "501(c)(3) Corporation?" Being a "501(c)3 corporation" means your corporation/organization has been designated as a tax exempt charitable organization by the federal Internal Revenue Service ("IRS"). In general, saying that a corporation is a "501(c)(3)" is equivalent to calling the organization a "non-profit" organization ("Non-Profit") with the [...]

By | 2018-04-12T12:54:28+00:00 March 29th, 2018|

San Diego Businesses: Using Stock Options as Employee Compensation

San Diego Businesses: Using Stock Options as Employee Compensation If you run your San Diego business as a non-public corporation, one method of compensating your employees for their hard work - particularly upper management employees - is by issuing shares of stock as part of their compensation package. This [...]

By | 2018-03-22T14:08:12+00:00 March 28th, 2018|

New IRS Audit Regime in Effect: Reviewing Your Partnership/LLC Agreement

New IRS Audit Regime in Effect: Reviewing Your Partnership/LLC Agreement Effective January 1, 2018, new guidelines went into effect with respect to partnership audits by the Internal Revenue Service. See Forbes article here. While no partnership or LLC that has chosen to be taxed as a partnership wants to [...]

By | 2018-03-22T13:31:38+00:00 March 27th, 2018|

How to Grow Your San Diego Small Business

How to Grow Your San Diego Small Business Growing and expanding your San Diego small business can be challenging. We here at San Diego Corporate Law are a small business too and we are constantly looking for ways to find new clients and serve our existing clients better. Here [...]

By | 2018-03-22T12:52:37+00:00 March 26th, 2018|

Does My San Diego Business Need an Employee Handbook?

Does My San Diego Business Need an Employee Handbook? If you have employees, then, yes, your San Diego business needs an employee handbook. As we have written previously, employee handbooks ("EH") do not have to be complicated. Basically, EH combine into one "book" all the various information that you [...]

By | 2018-03-15T15:05:33+00:00 March 25th, 2018|

Every Business Needs a Good Contract Management Method

Every Business Needs a Good Contract Management Method Even if you are just starting your new San Diego business, you are already beginning to accumulate contracts. Contracts are anything whereby you and your business agree to obligations that can be enforced in a court of law or court of [...]

By | 2018-03-15T14:54:07+00:00 March 24th, 2018|

E-Commerce Means Needing a Terms of Service Agreement for Your Website

E-Commerce Means Needing a Terms of Service Agreement for Your Website If you are running a San Diego business, you need a Terms of Service, sometimes called a Terms of Use, Agreement for your website. This is essential for two broad reasons - controlling how users access and use [...]

By | 2018-03-15T14:34:44+00:00 March 23rd, 2018|

San Diego Franchise Law: Types of Franchises

San Diego Franchise Law: Types of Franchises Everyone is familiar with franchises. Many of the businesses that we buy from are franchises, including fast food and other restaurants, stores, gas stations, etc. A franchise is a type of business where you, the local "franchisee," pay an annual franchising fee [...]

By | 2018-03-15T14:04:14+00:00 March 22nd, 2018|

What is a Certificate of Tax Clearance?

What is a Certificate of Tax Clearance? If you are involved in the sale or purchase of a San Diego business, among the many documents that will be needed at the closing are various Certificates of Tax Clearance from various California and county taxing authorities. Here is a quick [...]

By | 2018-03-15T13:46:56+00:00 March 21st, 2018|

Buying or Selling San Diego Business Assets? California’s Bulk Sales Act

Buying or Selling San Diego Business Assets? California’s Bulk Sales Act If you are planning on selling your San Diego business or if you are in the market to purchase one, you should be aware of the California Bulk Sales Act (hereinafter "CBSA"). See Cal. Comm. Code, §6101(a)(3). The [...]

By | 2018-03-15T13:23:15+00:00 March 20th, 2018|

San Diego Mergers and Acquisitions: Common Reasons Why Acquisitions Fail

San Diego Mergers and Acquisitions: Common Reasons Why Acquisitions Fail Mergers and acquisitions ("M&A") and other efforts to sell and buy businesses in San Diego are almost always complex. Even the smallest business with the most straightforward of business models involves an array of questions with respect to financing, [...]

By | 2018-03-15T12:30:56+00:00 March 19th, 2018|

Importance of Corporate Bylaws for San Diego Corporations

Importance of Corporate Bylaws for San Diego Corporations If you are running your San Diego business through a corporation or if you are thinking of starting up a new San Diego corporation, your company must have bylaws. Here are a few important facts about San Diego corporation bylaws. San [...]

By | 2018-03-15T11:59:48+00:00 March 18th, 2018|

Due Diligence and Selling/Buying a Business: Data Breach Disclosures

Due Diligence and Selling/Buying a Business: Data Breach Disclosures On February 21, 2018, the Federal Securities and Exchange Commission ("SEC") issued new guidance on public corporation cybersecurity disclosures; note that the SEC focuses on publicly-held corporations. However, the new SEC cybersecurity guidelines are relevant to small, closely-held corporations, and [...]

By | 2018-03-15T11:28:49+00:00 March 17th, 2018|

Selling Your San Diego Medical Practice? Focus on These Areas to Maximize Your Value

Selling Your San Diego Medical Practice? Focus on These Areas to Maximize Your Value Are you in the market to sell your San Diego medical practice? If so, please contact us here at San Diego Corporate Law. We have the legal experience to help. Along with contacting us, here [...]

By | 2018-03-12T16:48:57+00:00 March 16th, 2018|

Five Ways to Avoid a Nasty Business Divorce

Five Ways to Avoid a Nasty Business Divorce You start up a new business here in San Diego with some friends and colleagues. Everything seems great at the beginning, but despite everyone's best efforts, it is just not working out because of different visions of where the business should [...]

By | 2018-03-12T16:35:48+00:00 March 15th, 2018|

Buying a San Diego Business: How to Avoid Successor Liability

Buying a San Diego Business: How to Avoid Successor Liability If you are thinking of buying a business in San Diego or elsewhere in California, it is important to know what liabilities and debts of the seller you are agreeing to pay and what liabilities and debts you are [...]

By | 2018-03-12T16:25:01+00:00 March 14th, 2018|

Nine Keys to a Successful San Diego Business Joint Venture

Nine Keys to a Successful San Diego Business Joint Venture In San Diego, a business joint venture comes into being when two or more businesses join together to engage in some limited business activity. As an example, two businesses might join together to build a small shopping center or [...]

By | 2018-03-12T16:02:27+00:00 March 13th, 2018|

California Business Control Structures: Comparing Corporations to Partnerships

California Business Control Structures: Comparing Corporations to Partnerships Sometimes it can be confusing to figure out who is in control of San Diego and California businesses. Part of the confusion results from the fact that businesses can be run in so many different structures such as sole proprietorships, partnerships, [...]

By | 2018-03-12T15:43:00+00:00 March 12th, 2018|

Who Can Work for a San Diego California Professional Corporation?

Who Can Work for a San Diego California Professional Corporation? Professional corporations can be created specifically for doctors, nurses, and healing arts practitioners under the Moscone-Knox Professional Corporation Act. See Cal. Corp. Code, §§ 13400-13410. When formed, the professional corporation becomes a legal entity separate and apart from the [...]

By | 2018-03-12T14:44:34+00:00 March 11th, 2018|

Six Tips for Conducting Due Diligence When Buying a San Diego Franchise

Six Tips for Conducting Due Diligence When Buying a San Diego Franchise Franchising is big business. According to data from the International Franchise Association (IFA), in 2016, there were about 732,800 franchise businesses across the US employing over 7.5 million people and producing an estimated $675 billion in revenue. [...]

By | 2018-03-12T14:11:14+00:00 March 10th, 2018|

San Diego Startups and Royalty Financing

San Diego Startups and Royalty Financing Every new San Diego and California startup needs some sort of working capital to get the business up and running. The usual method is some combination of self-financing, locating venture capital or investment financing, or finding an angel investor. Another less-well-known is something [...]

By | 2018-03-12T13:42:07+00:00 March 9th, 2018|

Tips on Winning an Independent Contractors/Consultant Tax Audit

Tips on Winning an Independent Contractors/Consultant Tax Audit If your San Diego or California business has independent contractors and/or consultants, you may be subject to an audit by taxing authorities to determine whether you have purposely or inadvertently misclassified your employees as independent contractors/consultants. This is NOT an audit [...]

By | 2018-02-28T15:31:17+00:00 March 8th, 2018|

Buying or Selling a San Diego Business: Dealing With the Commercial Lease

Buying or Selling a San Diego Business: Dealing With the Commercial Lease If you are buying or selling a business in San Diego, one of the most important aspects of the transaction is often handling the transfer/assignment of the commercial lease. Many businesses in San Diego and California rent [...]

By | 2018-02-28T14:53:40+00:00 March 7th, 2018|

San Diego Business Law: Using an “Account Stated” to Ensure You Get Paid

San Diego Business Law: Using an "Account Stated" to Ensure You Get Paid We wrote recently about how San Diego and California businesses can use written contracts to help them get paid fully and paid in a timely fashion. In this article, we address how your business can create [...]

By | 2018-02-28T13:42:59+00:00 March 6th, 2018|

Flexible Disclosure Options Under Regulation D – Rule 504

Flexible Disclosure Options Under Regulation D - Rule 504 In general, any securities to be offered or sold in San Diego or in California must be registered to comply with both federal and California securities laws -- the Corporate Securities Law of 1968 (Corp. Code, §§ 25000-25707) and the [...]

By | 2018-02-28T13:19:37+00:00 March 5th, 2018|

San Diego Corporate Law: Revisiting What is a Security and Securities Fraud

San Diego Corporate Law: Revisiting What is a Security and Securities Fraud Offerings and sales of securities in California are governed by both federal and California securities laws -- the Corporate Securities Law of 1968 (Corp. Code, §§ 25000-25707) and the federal Securities Act of 1933 (15 U.S.C. § 77b). If you are offering [...]

By | 2018-03-20T10:48:45+00:00 March 4th, 2018|

San Diego Corporations: What are Fractional Shares?

San Diego Corporations: What are Fractional Shares? As the name would imply, a "fractional" share of stock means a fraction, part, or portion of a whole share. Thus, a one-half share is considered a "fractional" share. See Cal. Corp. Code § 407. Here is a quick primer on how [...]

By | 2018-02-28T11:36:31+00:00 March 3rd, 2018|

Update on California Shareholder’s Right to Inspect Records

Update on California Shareholder's Right to Inspect Records If you own shares of stock in San Diego or anywhere else in California, among your rights as a shareholder is the right to inspect and review the corporate books and records. This right was originally a common law right, but [...]

By | 2018-02-21T14:04:59+00:00 March 2nd, 2018|

San Diego Closely Held Companies: 10 Must-Have Provisions in Your Buy-Sell Agreement

San Diego Closely Held Companies: 10 Must-Have Provisions in Your Buy-Sell Agreement A buy-sell agreement is a contract made among the owners of a business or company that governs how, under what circumstances, and at what price a given owner's interest in the business/company may be purchased by the [...]

By | 2018-02-21T13:21:31+00:00 March 1st, 2018|

How do I Convert My San Diego LLC into a San Diego Corporation?

How do I Convert My San Diego LLC into a San Diego Corporation? If you are currently operating your San Diego business as a California LLC, you may at some point wonder if you can convert to a corporation. The answer is "yes." There are various reasons that your [...]

By | 2018-02-21T12:16:14+00:00 February 28th, 2018|

San Diego Corporate Law: Pros and Cons of Making an “S Corp” Selection

San Diego Corporate Law: Pros and Cons of Making an "S Corp" Selection One of the questions that is often asked by entrepreneurs is, “Should my corporation be a ‘C Corporation’ or an ‘S Corporation’”? Here is some basic information on the difference and the pros and cons of [...]

By | 2018-02-21T11:43:04+00:00 February 27th, 2018|

What is a Pre-Incorporation Agreement?

What is a Pre-Incorporation Agreement? If you are thinking about starting up a new business in San Diego with some friends, or maybe you have decided it is time to move from a partnership into a more formal corporate entity, it is often wise and useful to have a [...]

By | 2018-02-21T11:05:41+00:00 February 26th, 2018|

Your San Diego Corporation Minute Book: What Should be Included?

Your San Diego Corporation Minute Book: What Should be Included? Corporate formalities are important. Remember that one of the main purposes of forming a corporation for your San Diego or California business is to take advantage of the corporation's limited liability shield. That is, the owners of the corporation [...]

By | 2018-02-21T10:46:23+00:00 February 25th, 2018|

What Should be in Your Severance Pay Agreement?

What Should be in Your Severance Pay Agreement? Many San Diego and California businesses have employees. Occasionally, despite the best wishes and efforts of the business owners, employee layoffs and terminations are necessary. This happens for many reasons. Sales were just not high enough, changes in consumer preferences and [...]

By | 2018-02-15T15:00:36+00:00 February 24th, 2018|

Reviving Your San Diego Corporation

Reviving Your San Diego Corporation We recently published an article about the importance of paying your franchise tax to the California Franchise Tax Board. Basically, paying your taxes is important to make sure your corporation does not get suspended. A corporation is a legal entity that has a separate [...]

By | 2018-02-15T14:29:47+00:00 February 23rd, 2018|<