Corporations

What Constitutes Undue Influence?

April 21, 2017 | Ryan Penhallegon

Every time a contract is signed, the potential exists that one party fails to perform the obligations specified under the contract. In such cases, the aggrieved party may elect to file a lawsuit to try to seek performance under the contract or, more typically, for losses incurred as a result of the other party’s non-performance. However, in some cases, there may be a defense to the enforcement of the contract. One such defense is undue influence.

Undue influence is the unfair or improper persuasion of one person by another or excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will resulting in inequity. A party’s apparent consent to a contract (or transaction) is not free or real when it is obtained through undue influence. In other words, a contract obtained though undue influence is voidable. Consent is deemed to have been obtained through undue influence when the purported consent would have been refused if the acts constituting undue influence had not existed.

In California, there are four circumstances, prescribed by the civil code, in which undue influence occurs:

What do I do if I have a Data Security Breach?

April 14, 2017 | Mark Figueiredo

As a business owner, you should take every possible precaution to ensure that the information of your clients, customers, and employees are safe. However, as many corporate owners will tell you, even the most well-prepared companies – large or small – can be the victims of data breaches. One precaution to protect your company from these data security breaches is to seek counsel from an experienced California e-commerce attorney from the start. The following are only a few steps you may want to consider taking if a data breach happens to your business:

Take Immediate Action

The minute you learn of any type of breach, you should start working to repair the leak. You can do a lot of damage control by immediately addressing security flaws and securing the rest of your data. You should identify which servers have been affected and the nature of the data on those servers.

Differences Between S- and C-Corporations

March 31, 2017 | Katya Mezek

Entrepreneurs are faced with numerous decisions when forming a business. First, they need to contemplate the nature of the corporate entity they wish to operate (i.e., corporation, limited liability company, partnership, etc.). This decision hinges on many factors including the type of business, the desired ownership structure, tax considerations and potential financing opportunities. If the entrepreneur determines that forming a corporation is most advantageous for his or her particular situation, then he or she must next decide whether the corporation will be taxed as an S-corporation or a C-corporation.

The “S” and “C” designations refer to different subchapters of the federal tax code. They each have their own governing requirements and qualifications, some of which are laid out below.

S-Corporations

The Basics of Crowdfunding – Part 2

March 17, 2017 | Mark Figueiredo

Types of Crowdfunding for Investors

Like other types of investments, all crowdfunding campaigns are not created equal and one campaign can vary significantly from the next. There are two main types of crowdfunding investments on which we will focus here: reward-based crowdfunding and equity crowdfunding. However, it is important to realize that these are not the only types of crowdfunding available for investors in today’s market. In addition, there are many guidelines, requirements and regulations differing for each type of crowdfunding.

Reward-based Crowdfunding

What are the New Overtime Regulations?

March 10, 2017 | Jaclyn Ford

Last year, the Department of Labor (DOL) set forth a new “Final Rule” on overtime requirements that gave millions of Americans the right to time-and-a-half overtime pay. The law in place for years gave automatic overtime rights to non-exempt individuals who earned $455 per week ($23,660 annually). The new rule approximately doubled this threshold to $913 per week and was set to go into effect December 1, 2016.

On November 22, 2016, a judge in a Texas federal district court issued a preliminary injunction on the overtime rule, which halted it from taking effect. The DOL initially sought an expedited appeal of the matter and all of the briefs in the appeal of the injunction were to have been filed by January 31st. However, the litigation is on-going so what will happen to the law is still very much uncertain.

The change of administration only complicates the matter further, as the Trump administration opposes the rule. In reality, the new leadership of the DOL could drop the appeal and simply let the injunction remain permanently. Having an experienced employment lawyer who is up-to-date with these laws can help you understand the rules and mold your business accordingly.

Drafting Website Terms of Use – Part I

February 17, 2017 | Structure Law Group, LLP

The Terms of Use for a website is critical to maintaining control of how users access and use the information on the website, and in limiting liability for unapproved uses. Regardless of whether users actually read the Terms of Use – many don’t because it typically contains complex legal jargon – the Terms of Use binds users to its terms by virtue of their use of the website. The Terms of Use constitutes a contract between the business and the customer. That legal jargon protects from liability from users and allows control over the information contained on the website.

Businesses with an online presence — whether it be social media, e-commerce, mobile, static or interactive site — should always craft a carefully written Terms of Use. These terms are written to include a variety of different subjects relating to the business, the customer, information that is exchanged, information received and how that same information may be used.

Avoid Using Boilerplate or “One Size Fits All”

The Basics of Crowdfunding – Part 1

February 3, 2017 | Mark Figueiredo

What is Crowdfunding?

Crowdfunding refers to entrepreneurs seeking relatively insignificant financial contributions from a large number of people, often via social media or other internet networks, to fund the start or growth of a business venture. According to one report, more than 600 crowdfunding sites exist and raised billions of dollars for various types of businesses in 2015 alone, worldwide.

Types of Crowdfunding

Alter Ego Liability in California

January 13, 2017 | Katya Mezek

One of the primary benefits of incorporating your business and complying with corporate governance laws is that a corporation provides personal liability protections for its owners from the debts and liabilities of the corporation. These protections exist because a corporation is viewed as an entity that exists separate from its owners and this creates a “corporate veil” which is intended to protect the shareholders from personal liability. However, there are some circumstances in which an injured party may hold shareholders personally responsible for the debts or actions of the corporation. This is commonly referred to as either “alter ego liability” or “piercing the corporate veil.”

Generally speaking, when a party sues a corporation, that party seeks money from the corporation and not from shareholders as individuals. In some situations, however, owners may simply be using a corporation as an “alter ego” for themselves and they do not actually treat the corporation as a separate legal entity. In such cases, a party suing the corporation may pierce the corporate veil and try to hold the owners personally liable as well. While successful alter ego liability is rare, it does occur and all corporate owners should take steps to avoid it whenever possible.

Signs of “Alter Ego” Corporations

What is an REIT?

December 16, 2016 | Structure Law Group, LLP

There are many different types of businesses in which you can invest and earn profits, many of which that involve real estate. One important investment opportunity is a real estate investment trust, or REIT. This type of investment was created by Congress to give stockholders the opportunity to reap benefits from income-producing real property without having to go through the entire process of purchasing the property. There are different types of REITs and also many regulatory requirements for this potentially lucrative business endeavor.

Types of REITs

There are three main types of Real Estate Investment Trusts and the following is a brief description of each:

How To Prevent Competitors From Invading Your Workforce

December 9, 2016 | Jaclyn Ford

Many people will say that your business is only as good as your best employees. In fact, you may have one or more top employees who are absolutely integral in building and maintaining the success of your company. While having talented employees is a benefit to any business owner, it also tends to draw the attention of your competitors.

Identify the most important employees.

Your company may have some employees who could leave with only minimal interruptions to your business operations. On the other hand, there may be a select few whose absence may substantially harm your bottom line. Identify the top performers in your company through performance reviews and other tools and focus on keeping them satisfied. After all, your competitors will not be actively seeking your “benchwarmer” employees – they will be looking to take your Stephen Curry.