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For many Silicon Valley companies, incentive stock options are an important investment strategy for maintaining long-term relationships with employees. It is important to find the investment strategy which is right for your business. The experienced Silicon Valley corporate attorneys at Structure Law Group will help your business identify its employment and investment needs, and access the tools which most efficiently meet these needs.

What Are Your Goals?

The first step in implementing incentive stock options is to consider the specific goals you wish to meet by use of such options. Do you hope to retain employees who might be considering employment elsewhere? Are there specific sales or design goals you need to meet? By identifying the specific problem, employers can determine whether incentive stock options are the appropriate tool to meet their goals.

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Employment law is a constantly changing landscape of regulations promulgated on a national state, and even local level. Wages, gender discrimination, hours, working conditions, safety precautions, and many other aspects of the employee-employer relationship are regulated by federal, state and local employment laws. A San Jose employment law attorney can help protect employers’ rights while also helping to ensure compliance with employment laws and regulations.  Following are California laws which have been recently updated to provide employees with more legal protections.

Situations in Which Employees Have the Legal Right to Take Time off Work

Sections 230 and 230.1 of the California Labor Code provide specific rights to workers who have been the victim of domestic violence, sexual assault, or stalking. In general, these laws protect an employee’s right to take time off work to attend to matters related to the crime they have suffered. These matters include: obtaining a restraining order or other legal protection, seeking medical attention, obtaining services from domestic violence shelters or rape crisis centers, participating in psychological counseling, and creating a safety plan to prevent the recurrence of the crime. Employers are prohibited from terminating, discriminating, or retaliating against an employee who exercises these rights.

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California is one of the most innovative and creative job markets in the world. Every year, advances in a wide variety of industries reach consumers as a direct result of work done by California employees. Fashion, entertainment, technology – these are just a few of the many industries which develop cutting-edge consumer goods in California. Employers can protect their valuable intellectual property in this creative and fast-paced market by making sure to have their employees sign a non-disclosure agreement. With strategic employment agreements, such as non-disclosure agreements, employers can create legally enforceable protections for their products, designs, developments, and other intellectual property.

What is Intellectual Property?

Intellectual property is a broad term which applies to creations of the mind. It can apply to artistic works, such a manuscripts or songs. It can apply to branding, such as logos, colors, and package designs. It can also apply to designs for inventions and consumer goods. All of these types of intellectual property have value, which is owned by an employer who hired a worker to create them. In some cases, this intellectual property can be a highly valuable asset. Employers should seek out an experienced California Employment Attorney to help ensure they have the correct strategic employment agreements to take precautions to protect their intellectual property.

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Hedge funds are defined as a limited partnership of investors that use high risk methods to realize large capital gains. Without an applicable exemption, the hedge fund must register with the Securities and Exchange Commission and meet complex, ongoing filing and disclosure requirements. However, depending on investor qualifications, the hedge fund can avoid being defined as an investment company if its participants are either accredited investors or qualified purchasers. Thus. hedge fund managers should consult with an experienced California corporate attorney in order to ensure that their hedge fund practices are in compliance with existing law and regulatory mandates.

The Difference Between an Accredited Investor and a Qualified Purchaser

An accredited investor is an individual who satisfies SEC requirements for income, net worth, asset size, government status, and/or professional experience. In other words, an accredited investor is financially savvy, and because of this , he or she has less need for the protections offered by mandatory regulatory disclosures. Thus, an investment advisor or group working with an accredited investor can be exempt from certain mandatory disclosures. A qualified purchaser is similar to an accredited investor, but requires a higher net worth requirement as defined by the United States Code.

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Fotolia_136329992_Subscription_Monthly_M-300x200The sale of a business can be far more complicated than simply signing contracts and transferring assets from one side to the other. Tax and civil liability can be incurred in a traditional sale, anonymity may be required for a host of reasons, and in hostile takeovers, the buyer will need to bypass the seller’s Board of Directors altogether and go directly to the shareholders in order to have the sale approved. Establishing a shell corporation or holding company are two examples of ways to accomplish such goals in a business transaction. A Silicon Valley corporate lawyer can help your business identify its goals and determine which tools best meet its needs in any sales transaction.

What is a Shell Corporation?

As a general matter, a shell corporation can be thought of as a tool for business transactions. As described above, shell corporation can be used to achieve specific goals in connection with business transactions, such as maintaining anonymity, reducing tax liability, or obtaining financing. For example, many startup companies utilize shell corporations in order to store funds during early stages of financing.

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There are many ways for San Jose technology companies to obtain startup financing and fundraising. One way in which private financing and fundraising can be accomplished is through convertible notes, and may or may not require the involvement of traditional venture capital firms. Convertible notes can allow startup companies to determine the amount of control that their investors will have over the management of their company during the initial startup phase. The experienced San Jose corporate attorneys at Structure Law Group can help your startup explore all financing options to advise on which are best for your business.

A convertible note is a form of short-term debt that converts to equity at a specified point in the future. For startup companies, this is most often accomplished by converting an investor’s initial investment into a given number of shares in the company, at a specified round of financing. The equity does not need to be expressed in shares of common stock, nor does it even have to occur during the first round of financing. The note’s terms and conditions can be negotiated to meet the needs of both the startup company and its investor(s).

Other Negotiable Terms of a Convertible Note

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The Securities and Exchange Commission has, in recent months, been closely monitoring private equity and venture capital fund managers in order to identify conflicts of interest. The more investments a particular manager oversees, the more potential there is that he or she will encounter a conflict for two (or more) investments. An experienced San Jose corporate attorney can help your business enact practices which will help your fund managers identify and resolve conflicts of interest as early as possible. This will save your business the time and expense of administrative sanctions, SEC hearings, and civil liability – all of which are potential ramifications for any violation of the fiduciary duty of loyalty to act in the best interest of each fund a manager manages.

The Problem Area of Related Transactions

When a venture capital or private equity funds manager engages in transactions closely related to the fund’s investors or portfolio companies, a potential conflict of interest is created. Common examples include co-investment, or when an investor, fund manager, or another one of the manager’s funds has the opportunity to invest in one of the fund’s portfolio companies under terms and conditions which are different from those of the initial investment. Co-investment can also present a problem when a fund manager has an investment opportunity which should be presented to two or more different funds and must determine which fund gets priority at a given time. Fund managers can also face conflicts of interest when divesting a fund of its assets. In such a case, many managers oversee other funds which would benefit from the purchase of the divested assets, but this would create a conflict between the interests of the selling fund (which must maximize the sales price) and the purchasing fund (which must minimize the sales price). When an affiliated transaction arises between a fund manager, its affiliates, the fund, or an individual investment, there is a potential that the fund manager will face a conflict between the interests of the initial fund investment and the affiliated transaction. The affiliated transaction must be carefully assessed for all potential sources of conflict.

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Many Los Angeles business owners find themselves forced into litigation in order to enforce their legal rights as creditors. There are many legal tools available to enforce these rights: liens, levies, garnishments, and charging orders are just a few of many examples. These and other tools can be used to allow a creditor access to a debtor’s assets in order to satisfy debts that have been recognized by a court. An experienced Los Angeles corporate attorney can help you determine which tools will best enforce your company’s legal rights against its debtors.Asset-Protection-300x200

A writ of attachment is a particular tool which is used to protect specific assets from being disposed of before a judgment is reached. The writ of attachment is a legal order issued by a court to a law enforcement agent. A writ of attachment is typically requested soon after a case is filed (in order to freeze the defendant’s assets while the case is pending).  A writ of execution is issued at the end of a case after the judgment is reached, in order to enforce a judgment debt that has been awarded to the creditor. The California Code of Civil Procedure establishes the procedures for obtaining a writ of attachment. Section 487.010 specifies the property which is subject to a writ of attachment, including interests in real property, accounts receivable, equipment, farm products, inventory, final money judgments, money on the premises of the debtor’s business, negotiable documents of title, instruments; securities, and natural resources (such as minerals, oils, or gases) on the debtor’s property.

How a Writ of Attachment Can Help Your Business

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California recently surpassed France and Brazil to become the world’s sixth-largest economy. As such, California is home to many businesses with significant assets. In this fast paced, value creating culture, it is not unusual for asset purchase agreements to be completed with pre-printed forms and templates.

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Unfortunately, many business owners learn the hard way that an asset purchase template fails to address the particulars of the business assets being acquired or sold and provides inadequate protection for the financial and legal interests at stake. An experienced corporate attorney can help protect your company by structuring an asset purchase agreement that is suited to your transaction, enforceable, and able to cover a wide array of contingencies that may arise.

Many Things Can Go Wrong in an Asset Purchase Transaction

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Fotolia_148839470_Subscription_Monthly_M-300x200Risk management is an important strategy for any business. Silicon Valley businesses can protect themselves from liability with effective indemnification provisions – These provisions can be instrumental to easing the financial burden of a lawsuit against your company.  Rather than your company paying for the legal costs of a lawsuit due to one of your business partners, you can obligate your business partners to pay for the legal costs through an indemnification provision. Learn more about the terms and conditions of indemnification and how to protect your business from future legal liability.

How Do I Indemnify My Business?

The first step to drafting an effective legal indemnification is identifying the specific types of liability your business needs to be indemnified from. For example, some businesses, such as theme parks, are based around services which are potentially dangerous to consumers. It is important that these businesses appropriately indemnify themselves against claims by those who use their business facilities. Specifically, theme parks may want to consider obtaining an indemnification in any contract with repair or technician companies providing repair and maintenance to their theme park rides. Professionals with high rates of malpractice claims (such as obstetricians) must also consider the appropriate means for indemnifying themselves against legal claims by patients.

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