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Trade-Secrets-300x169The federal Defend Trade Secrets Act (“DTSA”), which is mirrored by the Uniform Trade Secrets Act (“UTSA”) adopted by most states, provides employers with legal recourse after the misappropriation of their trade secrets. Whether employer trade secrets, defined as information that derives economic value by not being generally known, are illegally accessed by hackers or stolen by employees, there is no legal recourse for the theft under the DTSA if the trade secrets weren’t adequately protected. It is a necessary element of a claim for damages under the DTSA and related state legislation that an employer took reasonable precautions to protect its trade secrets. What constitutes “reasonable precautions,” however, is dependent on the facts and circumstances of each case.

Protecting Confidential Information & Trade Secrets from Employees

Not all confidential information qualifies as a trade secret. Accordingly, business practitioners recommend protecting confidential employer information from employee misuse through stringent employment contracts and confidentiality agreements. Its recommended employers insert the following clauses into their employment agreements:

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AdobeStock_230581609-1024x683The future is here, and it’s blockchain technology. Originally developed as a means of trading cryptocurrency, such as Bitcoin, blockchain technology is a digital system that allows digital information to be shared without being copied or altered. It does this by acting as a transaction ledger for digital dealings, registering every change, trade, and attempted access for anything secured through the blockchain. One of the many benefits of using blockchain technology as a medium for trading digital currency is the relative ease of 24/7 international trade. However, this comes with its own dangers when personal information, including personal financial information, changes hands over international borders.

Selecting a Blockchain Company

Blockchain technology is a private, not public, development. The technology typically isn’t owned by any one government or corporation, and as such, many digital providers offer their own variations of blockchain technology. Different developers build private (or public) cryptographic ledger (“blockchain”) systems and offer use of the same to digital industry providers. For example, last year Forbes compiled a list of emerging blockchain companies offering their own cryptographic ledger services. Examples of these companies include:

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AdobeStock_197945004-300x178California stock corporations are owned by their shareholders who then elect directors.  Directors, in turn, elect officers who handle a corporation’s day-to-day management. Accordingly, shareholders hold influential positions in a corporation through their voting power.

California requires corporations issuing more than one class of shares to designate the classes and/or series of stock in its articles of incorporation. A stock corporation’s capitalization, or “cap,” table is a type of ledger that designates shareholders’ percentage ownership and equity value.

Most early shareholders know the equity value of their ownership, but as companies add investors, assets, and shareholders, the shareholder ownership structure can shift. This may result in a dilution of shares, changing the structure of shareholder ownership. These changes can lead marginalized minority shareholders to file major shareholder litigation disputing changes to the corporate ownership structure.  While dilution may not affect the financial value of shares, it can have a drastic impact on voting rights and ownership structure.

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Employee-Stock-Ownership-Plan-300x200The U.S. Securities and Exchange Commission reports that many companies are using stock options as a way to attract and retain employees in the booming California business market. Employees granted stock options can profit by purchasing shares at a set exercise price and trading them at a higher price. Stock option incentives not only make employees more involved in your company but also provide an incentive for employees to help your Palo Alto business succeed. The better your business, the better your employees’ eventual payout.

The experienced Palo Alto business plan and stock option attorneys at Structure Law Group can use their expertise to review your stock option plan. We can analyze market trends and help you choose the best exercise price for your goals while protecting your legal interests. To schedule your stock option consultation, call our Palo Alto, California business attorneys today at 408-441-7500 or contact us online.

California Stock Option Law

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AdobeStock_279078466-300x188You’ve probably heard your grandfather complain that he did not patent the “mobile phone” he invented in 1942. If he had, he’d be a billionaire! Ideas come and go, but those who take the leap and protect those ideas often reap the benefits.

“Intellectual property” (“IP”) is defined as a unique “product of human intellect” protected by law. Intellectual property can be both in physical form, an idea, or even a design. Algorithms, programming techniques, song lyrics, and books are all forms of intellectual property. Federal law protects intellectual property from being used by unauthorized parties. Protecting business’s intellectual property will help the business maintain the value and benefit from their intellectual property. IP law is complex, and you’ll need the assistance of a Mountain View IP attorney from Structure Law Group to protect your rights under federal intellectual property law.

Types of Intellectual Property

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A market standoff agreement – also known as a lock-up agreement – is a legal contract which prevents company insiders from selling their shares in the company on the stock market for a certain period of time following an initial public offering (IPO). In most cases, the specified period of waiting time (i.e., the term of the market standoff) is typically 180 days. However, in some cases, the term can be anywhere from 90 days to one year.

The primary purpose of a market standoff agreement is to give the market time to “absorb” or “catch up” to the sale of recent new stock shares which are issued as part of the IPO. Otherwise, if company insiders or other individuals who hold stock in the company begin to sell their shares immediately, the stock’s value will more than likely decline quickly.

In most cases where company stock is issued to company employees, there is a standard clause in the written agreement which allows for insider sales to be locked during the IPO period. For more information about whether you or your company need a market standoff agreement, you should contact the corporate attorneys at Structure Law Group as soon as possible.

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Business law  frequently consists of contractual relationships. Contracts between business owners, shareholders, employees, clients, and vendors  are the very bones on which many businesses are formed. A single breach of contract litigation case in California, like a single broken bone, can cripple your entire business. For this reason, California law permits businesses to recover monetary damages for a breach of contract. Some damages are available by statutory law while others are specified in the contract. Strong business contracts can make or break your company. While you can’t prevent a breach of contract, you can often design contracts to maximum your position.

Litigating a Breach of Contract Case with a Los Angeles Litigation Attorney 

California Breach of contract litigation can get complicated, but a plaintiff Los Angeles Litigation Attorney must prove the following basic elements:

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In late 2018, CarrierEQ Inc. (Airfox) and Paragon Coin, Inc. were investigated and ordered by the SEC to make refunds available to their investors – in sum, the SEC’s order meant that Airfox may have to refund nearly 15 million dollars while Paragon would have to potentially refund 12 million dollars. These SEC reports highlight the importance of hiring an experienced blockchain attorney in this emerging field of law. From drafting your Articles of Organization to structuring your initial coin offering (ICO) or security token offering (STO), protecting the cryptocurrency of your clients with an experienced Silicon Valley blockchain attorney at Structure Law Group, LLP is essential.

Understanding Security Token Offerings (STO) & Blockchain Technology 

Unlike well-known digital currencies like Bitcoin or Ethereum, STO’s are security token offerings that allow companies to sell digital tokens to accredited investors prior to the digital tokens having any technical functionality.  This means STOs are often governed by federal security laws and must be registered with the SEC or find a proper exemption from registration. STOs are designed to function as traditional securities but are offered, sometimes in fractions, through blockchain transactions. Blockchain technology offers many benefits, including:

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It’s no secret that years of corporate research indicate that strategic debt can be beneficial for a business. Taking on corporate debt may confer certain tax benefits, and debt can be used to grow earnings and increase the value of the company. Companies may also be able to create higher returns on the borrowed money than the interest rate they are paying on the debt. However, too much debt or a poorly structured or executed financial strategy also negligently impact the marketability and value of a company, including Silicon Valley startups. In addition, both California startups and creditors alike must be mindful of the federal and state laws that apply to debtor/creditor relations.

Commercial Debt and The Fair Debt Collection Practices Act (“FDCPA”) 

The primary federal legislation governing debtor and creditor rights is the FDCPA; however, this legislation typically does not apply to business debts. It may apply to certain late payments of commercial debts. California’s version of the FDCPA, the California Fair Debt Collection Practices Act (“CFDCPA”), while broader than the FDCPA, also typically does not apply to business debts. As such, business debtors aren’t afforded the same protections as consumers but business and their creditors also have more latitude to negotiate and structure the financial arrangement they deem most appropriate. There are few, if any, state and federal laws that regulate business-to-business debt, but the FDCPA can provide some guidance for creditors. For example, creditors should generally not:

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So, you’ve decided to incorporate your business in California and form a corporation. This corporate structure provides multiple benefits in California, including certain California tax benefits and legal protections. Every state has different requirements for forming a corporation, and California is no different. Whether you’re incorporating a new business, a small business converting to a corporation, or a multi-national corporation coming to the states, the experienced corporate attorneys at Structure Law Group, LLP can help. Contact our experienced business attorneys at 408-441-7500 or online to schedule your free corporate consultation.

Types of Corporate Entities in California 

There are multiple types of business entities in California. From a sole proprietorship to a general stock corporation, you must choose the entity that’s right for you. Once you elect to form a California corporation, you must choose which type of corporation best suits your business. California recognizes the following types of corporations:

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