Start-Ups & Financing

Implications of Slack, Teams and Other Conversation Platforms

August 2, 2024 | Rakesh Ramde

Although platforms like Slack and Teams have become indispensable tools for modern collaboration, their widespread adoption raises crucial legal and compliance challenges for organizations. These platforms store a vast amount of user data, including messages, files and even employee metadata. They are subject to stringent data privacy regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). The GDPR has stricter regulations for EU citizen data privacy, demands explicit opt-in consent and grants extensive data subject rights like access and erasure. On the other hand, the CCPA, which is focused more on California residents, prioritizes data transparency and consumer control through access, deletion and opt-out mechanisms for data sales. Yet/overall, both regulations emphasize the importance of user empowerment regarding their data, requiring organizations to implement robust data protection measures and obtain informed consent for data storage and usage.

While conversation platforms offer significant collaboration benefits, their use necessitates navigating data privacy and compliance complexities. As such, organizations must prioritize user rights by:

Informed User Consent: Organizations must obtain explicit user agreement for data storage and usage. This involves clearly outlining the types of personal data collected, the purpose of collection, and how the data will be used in accordance with data privacy regulations.

Should You Convert Your Startup from a California LLC to a Delaware Corporation?

June 21, 2024 | Structure Law Group, LLP

When it comes to forming a new startup, a California limited liability company (LLC) offers a number of advantages. As the name suggests, an LLC protects the personal assets of individual members from business creditors. And since the LLC is a “pass through” entity, any profits are taxed on the returns of individual members.

But while this arrangement may be ideal for founder-run startups with just a few equity holders, once the business seeks financing from venture capital or other investors, it is often necessary to convert to a corporation. More precisely, a California LLC may need to convert to a Delaware Corporation. The California corporations attorneys at Structure Law Group can advise you on the benefits and drawbacks of making this move. Contact us today to schedule an initial consultation.

When Is a Conversion Necessary?

How to Open a Company in Delaware

December 22, 2023 | Tatiana Delogramatic

Many startups in the San Jose area look to Delaware when establishing their corporate structure. You have probably heard that many top companies are incorporated in Delaware. Delaware is a popular state to form a corporation. But what are the advantages to a Silicon Valley company operating in Delaware? And how can you create your own Delaware company? The San Jose corporations lawyers at Structure Law Group, LLP can help answer these and other questions about the startup process.

What Are the Advantages of Incorporating in Delaware?

Despite being one of the smallest states, Delaware plays a significant role in corporate formation and law, offering numerous advantages. The state’s appealing tax laws are a primary factor for companies choosing to incorporate there. Corporations not conducting business in Delaware are exempt from the state’s corporate income tax, even if incorporated there. Instead, they are subject to a ‘franchise tax,’ which is typically much lower than corporate taxes in other states. Furthermore, Delaware offers considerable privacy for incorporators, requiring only the registered agent’s name on filings. Additionally, the state allows a single individual to establish a corporation and hold multiple corporate roles simultaneously.

Asset Protection for Bay Area Entrepreneurs

November 17, 2023 | Jared Amory

Starting a new business venture is an exhilarating journey, but also involves significant financial risks. Seasoned entrepreneurs understand the importance of safeguarding their personal assets from undue exposure. If you’re an aspiring entrepreneur in the Bay Area embarking on your first startup, the experienced San Jose startup and financing lawyers at Structure Law Group can provide valuable guidance on developing a comprehensive asset protection strategy.

Although every situation is distinct, here are a few essential considerations to keep in mind when safeguarding your personal assets from potential business liabilities:

Create a Limited Liability Business Entity

The Importance of Due Diligence

October 27, 2023 | Jared Amory

The phrase “due diligence” is often used in the law and is a critical component when contemplating a business transaction. Due diligence means thoroughly investigating and analyzing the facts and key terms of the deal before engaging in a major business transaction, such as acquiring a company or investing in a start-up. These deals involve decisions that can have a significant financial impact, potentially involving millions or even billions of dollars. Therefore, it is essential to ensure that all parties involved are fully informed and aligned before finalizing any agreements.

The experienced Silicon Valley mergers and acquisitions lawyers at Structure Law Group can assist you in performing due diligence before entering into a transaction, either as a buyer or a seller. We know how to spot the various “red flags” that can doom a proposed deal and provide expert guidance on how to steer clear of or resolve such hazards.

The Key Elements of Due Diligence

Corporate Transparency Act

October 6, 2023 | Mark Figueiredo

As of January 1, 2024, all entities that are not exempt in California must file reports on their “beneficial ownership” with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). These reporting rules were part of the Corporate Transparency Act (CTA), which itself was enacted by Congress as part of the 2021 Department of Defense authorization bill. The Los Angeles corporate law attorneys at Structure Law Group, LLP, can advise you on your company’s obligation under the new rules and how to avoid potential regulatory issues with FinCEN.

New Requirements for Disclosing “Beneficial Owners” of Foreign and Domestic Companies

At its core, the CTA is an effort to enhance the Treasury Department’s ability to identify and take legal action against potential money laundering activities. In adopting the CTA, Congress determined that many actors involved in illegal activities like terrorist and tax fraud used “shell” companies to conceal their identities and move their illegally obtained proceeds through the U.S. financial system undetected. Given that corporation law varies from state-to-state, there were no uniform national requirements for reporting the actual or “beneficial” owners of many corporate entities.

Why Your Los Angeles Business Needs an Attorney

June 16, 2023 | Koah Doud

Whether you are looking to fund your next startup or you have an existing business that is well on its way to financial success, it is always a good idea to work with an experienced business attorney who can provide you with valuable advice and legal representation. Especially in California’s ever-changing business climate, having a lawyer is a necessity. That is why the Los Angeles business attorneys at Structure Law Group are here to help your business reach its full potential.

Four Ways Structure Law Group, LLP Can Help Your Los Angeles Start-Up

Some business owners look at hiring an attorney as an unnecessary expense. But the reality is that every business has to deal with legal issues on a daily basis. And you will be in a much stronger position if you have an experienced attorney at your side.

Business Entity Formation and Tax Implications

March 17, 2023 | Mark Figueiredo

One of the legal services that corporate attorneys provide is advising startups with strategies to protect their long term interests. Each business entity has specific tax requirements and a San Jose business attorney can help you determine which is best for your venture. In this article, we’ll discuss specific business entities and how they’re taxed.

Sole proprietorship

A sole proprietorship is not a business entity. It’s the default state of an individual who owns a business. Those who run sole proprietorships are taxed as individuals with assets and profits. The biggest pitfall of the sole proprietorship is that you end up paying both the employee and the employer side of social security. These are typically split between employer and employee.

Free Speech or Censorship?

February 17, 2023 | Jared Amory

It doesn’t take long on the internet to find extremist language, hate speech, and accusations of censorship. Often these are all found within the same post. Business owners have free speech rights, but free speech from any employee can expose a company to liability for false statements. It is important for business owners to create clear corporate policies about employee communications both on company websites and personal social media channels.

The Current Legal Standard

Current case law on this issue dates back a few decades. In 1964, the Supreme Court decided New York Times Company v. Sullivan, a First Amendment case involving published criticism of public officials. The Court found that Sullivan had indeed proven that the New York Times had published inaccurate statements about his office and subordinates. The fact that the statements were false did not, however, support his case for libel. The Court enacted a new standard of “actual malice.” This new rule means that an official must prove the false statement was published with the knowledge that it was false – or with gross recklessness – to sustain a libel case. Unless this legal definition of “actual malice” exists, the false statements are protected as free speech under the First Amendment.

Buy-Sell Agreements in Texas: What You Need to Know

February 3, 2023 | Austin Jackson

Many small business owners in Texas need to account for the future of the ownership and continuity of their business, and a buy-sell agreement will often accomplish these goals. When you need help crafting a buy-sell agreement, make sure you are working with a skilled Texas business attorney.

Texas Buy-sell agreements can come into play for both unforeseen and foreseen events among owners, including a business partner dying, becoming disabled, getting divorced, or declaring bankruptcy. Other complications can include a business partner changing their vision for the company, losing interest in the business, needing a cash infusion, or acting in bad faith.

Necessary Elements of a Buy-Sell Agreement