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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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, [...]
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 [...]
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. [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
California and San Diego Businesses: What is a Statute of Limitations? For San Diego and California businesses, there are laws that limit the amount of time that any person has the right to file a lawsuit. Such laws are called statutes of limitations. The time periods vary depending on [...]
San Diego Business Law: What is the Joint Employer Doctrine? Let's say you are running a pharmacy in San Diego. Let's call it San Diego's Best Drug Store. Like many businesses, San Diego's Best Drug Store has customers who want over-the-phone, on-demand, and speedy delivery of their products. Many [...]
San Diego Business Law: Preventing Raids on Your Employees (Part II) We wrote earlier about steps to take to prevent raids on your employees when a high-level, managerial employee is departing. See here. A recent case out of Wisconsin gives us an opportunity to review, update, and provide additional [...]
San Diego Businesses: Finding Workers in the "Gig" Economy Most San Diego and California businesses know about the so-called "gig" economy. Maybe you have hired a few "gig" workers here and there. In general, a "gig" worker is a short-term independent contractor. Given certain structural elements in the national [...]
San Diego Corporate Law: Keeping Biometric Data Private and Secure We wrote recently about how all San Diego and California businesses must ensure the privacy and security of customer data. See our discussion here. As we noted, your computers and networks are prime targets for criminals seeking to hack [...]
San Diego Business Law: What is a Breach of Warranty? All San Diego and California businesses want to "do good" by their customers, want to provide products and services that meet their customers' needs and keep them happy. This is the basic method of running a successful business and [...]
New California Labor Law: Impacts on Selling/Buying Your San Diego Business As the calendar turned to 2018, many new California laws went into effect. See LA Times news report here. Among the new laws was a provision that now prohibits private and public employers from seeking information on a [...]
Checklist for Limiting Personal Liability When Running Your San Diego Business When you are in business, there are many steps that you can take to limit your personal liability and your family's liability for business debts and obligations. We here at San Diego Corporate Law can help you with [...]
Selling or Buying a Business? Valuation Methods When you want to sell your San Diego small business or professional practice, or if you are in the market to purchase, at some point, everyone will have to decide how much the business is worth. This is obviously important for the [...]
Top Reasons Partnerships Fail Surely everyone can agree that starting a business or being in a San Diego business with friends as partners can be rewarding at a personal or emotional level as well as an economic level. You and your friends enjoy each other’s company, share common visions [...]
What is the Legal Doctrine of "Surviving The Closing?" When you are buying or selling a San Diego business, there will be a sales contract. Among the provisions of sales contract will be various “representations and warranties” made by the various parties. A “representation” is a factual statement. A [...]
Buying a San Diego Business? Four Must-Have Seller Representations and Warranties When you are buying a San Diego business, there will be a sales contract that sets out all of the covenants and conditions of the sale. In the sales contract, your trusted and experienced California corporate attorney has [...]
San Diego Corporations: What are Shareholder Rights? When you become a shareholder of a San Diego corporation or any corporation in California, you become an owner of some interest in the company. As an "owner," you have certain rights, just like the owner of land has certain rights, like [...]
San Diego Business Law: What is an Unpaid Internship? Unpaid internships can be beneficial to both the young intern and to the San Diego business "hiring" the intern. But businesses must be careful because under some circumstances, the "intern" might be considered an "employee" who must be paid for [...]
#MeToo Gets a Victory: Confidential Settlements Will No Longer be Tax Deductible Sexual harassment continues to be in the news. As we wrote recently, sexual misconduct in Hollywood and in the media has been a huge continuing story. It seems like new allegations are made every day. Indeed, it [...]
San Diego Corporate Law: What is an Incorporator? When you want to create a corporation for your San Diego business, you can hire what is known as an "incorporator." Your trusted and dedicated corporate attorney can be your incorporator; in fact, most often the incorporator is your corporate attorney. [...]
After You Incorporate, What Next? Congratulations on your newly incorporated San Diego, California corporation. Filing the incorporation papers with the California Secretary of State is not the end of the process. There are several important steps to take after you have become an "Inc." Here is a quick list. [...]
San Diego Businesses: Checklist for Protecting Your Computer From an Angry Administrator We have written recently about the need to protect your digital and virtual assets. One of many possible threats is a rogue or angry or vindictive recently-fired network administrator. Bad situations do happen; Uber recently was forced [...]
California Corporation Law: Can Minority Shareholders be "Controlling" Shareholders? As we have discussed, it has long been the law in San Diego and California that majority shareholders of corporations and other corporate entities owe fiduciary duties to other shareholders and owners. Among those duties are: Duty of loyalty to [...]
Franchise vs. Licensing Agreement: What is the Difference? Most of us are familiar with franchises. Many fast food restaurants and retail stores are franchises. Services can also be franchises, like tax preparation companies. In general, a franchise is a business form where you pay a fee to the franchisors [...]
What is a Buy-Sell Agreement for a San Diego Business? For small businesses with only several owners, a buy-sell agreement establishes up front the terms and conditions under which owners can be bought out, and at what price and under what conditions. Buy-sell agreements are essential for closely-held and [...]
Five Pitfalls to Avoid if You are Starting a New San Diego Business Launching your new San Diego startup is exciting and opens a new chapter in your life and in the lives of your family and your business partners. But, everyone knows that starting a new business can [...]
Doing Your Due Diligence When Buying a San Diego Business Doing Your Due Diligence When Buying a San Diego Business When contemplating buying a San Diego business, as the buyer, you must always engage in what is called "due diligence" before finalizing the purchase. Basically, due diligence is research [...]
California Mergers and Acquisitions: Reasons to Assume the Target's Debt In the news recently is the announcement by fast-food chain Arby's Restaurant Group that it will acquire Buffalo Wild Wings for $2.4 billion in cash. The deal calls for Arby's to pay $157 per share in Buffalo Wild Wings [...]
How Being an "Inc." or an "LLC" Enhances Your PR Campaigns Every business needs public relations ("PR") campaigns, and converting to a California corporation or Limited Liability Company can help your PR campaign be even more successful. PR campaigns are different that mere advertising -- that advertising is part [...]
San Diego Business: Using Attorneys' Fees Clauses to Your Advantage We here at San Diego Corporate Law believe that, when possible, every San Diego business should use their business contracts to their advantage. That includes the use of attorneys' fees clauses with teeth. California Corporate Law: What is an [...]
San Diego Businesses: What is Trade Libel? In a competitive marketplace, you advertise your San Diego business and you try to set yourself apart from competitors. So, you make a few statements about your competitor; you do a bit of "trash-talking." Sometimes, these statements go too far and slip [...]
Checklist for Official Social Media-Use Policy for Managed Employees (Part II) This is the second in our series of posts about writing your company's official social media use policy. In the first part, we tackled the issue of generalized social media use for your employees when you do NOT [...]
Digital Assets and Account Information: What San Diego Businesses Need to Do As business becomes increasingly internet-based and focused on mobile and social platforms, many San Diego businesses are accumulating what are known as "digital assets." This is good. Digital assets are online financial accounts such as Paypal, and [...]
San Diego Business Law: Updating Your Company Sexual Harassment Policies San Diego Business Law: Updating Your Company Sexual Harassment Policies Since Harvey Weinstein was "outed" as a sexual predator back in October 2017, sexual harassment has been in the news nearly every day. Dozens of other celebrities, politicians, and [...]
Contract Law: Can You Shift a Burden of Proof Via Contractual Provision? Contracts are essential to San Diego and California businesses. Generally, contracts are intended to simply facilitate operations such as purchasing supplies and services, making sales, and locking in employees. Sometimes contracts can be used -- and should [...]
San Diego Commercial Leases: What is CAM? "CAM" stands for common area maintenance with respect to rent-like charges that are usually contained in commercial and retail leases. As we recently discussed, most commercial and retail leases are "triple net leases." The lease is "triple" in that the tenant pays [...]
Raising Startup Capital in San Diego: Comparing Regulation D vs. Regulation Equity Crowdfunding Most people have probably heard of “crowdfunding.” As the name suggests, crowdfunding is the obtaining of small amounts of money per person -- the “funding” -- from a somewhat large group of people -- the "crowd" [...]
Equity Crowdfunding: A Quick Primer for San Diego Startups Equity crowdfunding can be a viable option to help San Diego and California businesses and entrepreneurs raise startup working capital. However, because equity crowdfunding involves the offering and sale of "securities," anyone considering crowdfunding should make sure to get counsel [...]
Basics of The Attorney-Client Privilege (Part IV) As discussed in Part I of this series, the attorney-client privilege shields and protects from disclosure confidential communications between an attorney and his or her client. In Parts II and III, we explored factual matters and information not subject to the privilege [...]
Basics of the Attorney-Client Privilege (Part III) As discussed in Part I of this series, the attorney-client privilege shields and protects from disclosure confidential communications between an attorney and his/her client. In Part II, we explored various factual matters and information not subject to the privilege. In this Part [...]
Basics of the California Attorney-Client Privilege (Part II) As discussed in Part I of this series, the attorney-client privilege shields and protects from disclosure confidential communications between an attorney and his or her client. Every San Diego business needs a trusted and skilled business attorney. In this Part II, [...]
Basics of the Attorney-Client Privilege in California (Part I) Most of us think of lawyers as people who provide services. However, many forget that lawyers have legal and ethical obligations that prevent them from disclosing your confidential and secret information. This is called the attorney-client privilege. This is how [...]
What is a Legal Audit Letter? As your San Diego and California business grows, you are going to eventually need audited financial statements prepared by a certified public accountant ("CPA"). If you have sought out conventional investor financing, having such certified financial statements is often a prerequisite to obtaining [...]
What are Estoppel Certificates? When you are running a business in San Diego or anywhere in California, your business likely has many contracts and agreements. These include leases that you might have for retail or office space and might include vendor and supplier contracts. Likewise, any sort of financing [...]
What to Expect When Selling Your San Diego Business When selling your San Diego or any other California business, there are basically three stages in the process -- sometimes a fourth stage if you have agreed to provide post-sale training or have agreed to other post-sale obligations. Here is [...]
San Diego Business Contracts: The Importance of Including Severability Clauses Sometimes, despite the best efforts of your talented business attorney, a court examines a contract and determines that some provision in the contract is void or unenforceable. This happens sometimes because of a change or clarification in the law [...]
California Business Contracts: What is the Merger Doctrine? San Diego and California businesses largely operate on the basis of contract law. Often, the contracts are simple and pre-printed; other times the contracts are lengthy and complicated. Likely, the longer contracts went through several versions and had many revisions. If [...]
San Diego Businesses: Using On-Time Payment and Interest Clauses With any contract in which payment is not due on delivery -- typical vendor and service contracts, for example -- it is essential to communicate in the contract the expectation that payment will be made on time; monthly interest provisions [...]
Checklist for Writing an Official Social Media Policy (Part I) Even if your San Diego business is small, with just a couple of employees, it is important to have a social media policy statement. Indeed, you may need TWO policy statements: one for regular employees and another for employees [...]
What is a California Nonprofit Corporation? A Quick Primer As the name would imply, a nonprofit corporation is a corporation that is formed for any purpose other than trying to make a profit. Charity and religious organizations are good examples. That is not to say that a nonprofit does [...]
San Diego Businesses: A Few Tips for Mining Your Data to Drive Marketshare Every San Diego and California business gathers data. "Data" does not have to be anything mysterious or processed by room-sized computers. Data can be as simple as your rolodex full of names, numbers, and addresses. Moreover, [...]
Are Cryptocurrencies "Securities" Under California Law? SEC Offers Guidance Cryptocurrencies have been in the news lately with Bitcoin reaching the $19,000 plateau in mid-December 2017. Some analysts are predicting that Bitcoin will surge even higher, though other analysts disagree. See report here. But, Bitcoin is not the only cryptocurrency. [...]
The Value of Mediation as an Alternative to Litigation As we have said in the past, every San Diego and California business can expect to have business-related legal disputes at some point. Disputes arise not necessarily because someone is behaving badly, but often are because mistakes happen or circumstances [...]
San Diego Liquor Festivals and California State Trademarks Many San Diego and California businesses understand the importance of trademarks. Many are familiar with the fact that registering trademarks is done through the US Patent & Trademark Office. However, it is less well-known that a San Diego business can register [...]
California Contract Drafting: Employee vs Independent Contractor Many San Diego and California businesses have employees and many have independent contractors, and some have both. Whether a worker is considered an "employee" or an "independent contractor" has important implications for many aspects of a business including: Labor laws Taxation -- [...]
Considerations When Crowdsourcing Your R&D and Marketing For the last few years, crowdsourcing research and development ("R&D") and marketing has become the big "in" thing for San Diego and California businesses. A good example is a certain national brand of potato chips that has been running a yearly new-chip-flavor [...]
The Value of a Demand Letter Sent by Your Trusted Business Lawyer It is almost inevitable that, when running your San Diego business, you are going to end up in various business-related disputes. Some vendor will not deliver, some customer does not pay, or your landlord has made a [...]
What is New With California Franchise Relations Law? The relationship between a franchisor and franchisee is governed by the California Franchise Relations Act ("CFRA") codified at Cal. Bus. & Prof. Code, § 20000 et seq. The CFRA covers renewal, nonrenewal and termination of franchises. There have been some recent [...]
How Talented Legal Counsel Can Help Your Business Grow Every business needs a talented and experienced business lawyer. Aside from providing good advice, a talented and dedicated business lawyer is actually "good for business" and can help your business grow. Here are the ways that we here at San [...]
Checklist for Forming Your New Corporation or LLC: Lessons from Club de Cuervos Whether you and your friend(s) are starting a new business or whether you are finally taking that momentous step and converting from partnership to corporation or LLC, here is a checklist of issues to decide in [...]
The Importance of Shareholder's Meetings We recently wrote about the board of directors and corporate directors of San Diego corporations. In this article, we discuss the importance of shareholder meetings. Although these kinds of meetings may be less frequent, they are often more important. San Diego Corporations: Typical Structure [...]
Legal Characteristics of the Corporate Form Corporations and other corporate forms are common in our economic landscape. Average people deal with corporations in every aspect of their lives, from the grocery store to cell phone service providers. Many people probably know that corporations are formed by filling out and [...]
Another Reason to Incorporate: Establishing a Business Credit Rating There are many advantages to creating a corporation to run your San Diego business including: Shielding personal assets from business-related creditors Tax expensing options Other potential tax benefits -- "S" Corp status, for example Transferability of the business Continuity of [...]
Duties Owed to Other Shareholders When Dissolving the Corporation Under California law, all officers, directors, and majority shareholders owe fiduciary duties to minority shareholders and to other members of the corporation. Among the most common claims of breach of fiduciary duty are: Self-dealing Diversion of business opportunities. Most often, [...]
YouTube and Specific Performance in California (Part II) With respect to business contracts in California, if there is a breach of contract, sometimes the remedy of "specific performance" is available. Cal. Civ. Code, § 3384 provides that "[e]xcept as otherwise provided in this Article, the specific performance of an [...]
What is Specific Performance in San Diego? (Part I) With respect to business contracts in California, "specific performance" is one of several remedies that a San Diego business can seek for breach of contract. For this part I on specific performance in California, here are a few basic legal [...]
California Businesses: Yes, You Can Limit the Right to Sue Generally speaking, business contracts serve two purposes - one, to effectuate your deal and, two, to limit your risks and legal liability as much as possible. One of the best ways to limit your legal liability is to obtain [...]
Selling a San Diego Business: What is Your Duty to Disclose? Selling a business in San Diego is a complex and time-consuming process. Your skilled and talented business lawyers, like the ones at San Diego Corporate Law, have drafted and redrafted the sales contracts. Now everyone is in the [...]
Data Breaches and Data Protection for San Diego Businesses Every successful business should have a website and a web presence. Along with the positives of e-commerce, there come many responsibilities. We wrote recently about how businesses must keep their websites in compliance with the American Disabilities Act and two [...]
California Private Security Exemptions: What is a Preexisting Relationship? Sales of securities in California are governed by the California Corporate Securities Law of 1968 codified at Cal. Corp. Code, § 25000 et seq. Violation of the law can lead to criminal, civil, and administrative proceedings. San Diego Securities Law: [...]
San Diego Medical Professional Corporations: What Fiduciary Duties are Owed? In San Diego, medical professionals -- healing arts practitioners -- are able to form Professional Corporations pursuant to the Moscone-Knox Professional Corporation Act. See Cal. Corp. Code, § 13400 et seq. As with all corporations, the main purpose of [...]
Breach of Contract in San Diego: The Types of Damages Available If you are running a business in San Diego or in any other part of California, you are constantly dealing with contracts. Hopefully it is rare, but at some point, you may end up in a contract dispute. [...]
Who is a "Director" With Respect to Your San Diego Corporation? In general, San Diego corporations are run by a Board of Directors. The Board meets regularly to make important, strategic decisions. Among those decisions are hiring a chief executive officer ("CEO") and then authorizing the CEO to run [...]
Six Mistakes to Avoid When Running the Family Business A family-owned and family-run business in San Diego should be treated as seriously as any other business. In San Diego County, California, there are six mistakes to avoid when running your family business. Failure to Get Permits, Licenses, and Registrations [...]
When is a San Diego Contract Voidable Because of Mistake? There are many defenses to a breach of contract lawsuits in California. One of them is mistake. A mistake can be unilateral, made by only one party to the contract, or bilateral, made by both parties. Excellent and trusted [...]
What is the Parol Evidence Rule? If your San Diego business has signed a contract for, say, exploration and development of natural gas and oil on certain lands, but a dispute arises over the contract, then you will likely end up in court. The parol evidence rule is a [...]
Who can Sign Contracts for My San Diego Business? Most business contracts are made in writing and, occasionally, the question arises: Who can sign contracts for my business? In short, the answer is owners and anyone who the owners authorize to sign contracts on behalf of the business. In [...]
Can a San Diego Business Really Accept an Offer by Silence? As we have recently discussed here, the basics of contract formation are offer, acceptance, and consideration which creates a meeting of the minds. Generally speaking, "acceptance" is saying or writing or acting in some way that expresses agreement [...]
What is Vicarious Liability? In San Diego, businesses are liable for the acts of their employees when the employees are working. In general, employees are agents for their employers and all principals can be held liable for the acts or omissions of their agents when conducting the business of [...]
How is a San Diego "Fiduciary" Different from a San Diego "Agent"? In San Diego and all across California, businesses and even ordinary people hire and retain agents. Think, for example, about buying a house. You go online or make phone calls and hire a real estate agent. That [...]
San Diego Business Contracts: What is a "Time is of the Essence" Clause? You sometimes see a clause in a California business contract that simply says: "Time is of the essence." You may ask yourself: What does that mean? In basic terms, a contract provision stating "Time is of [...]
