business sales

What are Escape Clauses in California Real Estate?

June 2, 2017 | Structure Law Group, LLP

Real estate transactions are complex and often involve valuable property and a significant sum of money. In a real estate transaction, both the buyer and seller of real estate have significant interests on the line they desire to protect; one way of doing this are escape clauses. Since many things can go wrong in a real estate transaction, real estate contracts include many different provisions and clauses that can come into play during the course of the deal or transaction. It is often wise to have an experienced California real estate attorney draft or review any contracts.

A real estate buyer understandably wants to be aware of the condition and known risks of the property they are purchasing and to ensure the transaction will not unknowingly cost them more money than anticipated in the long run. On the other hand, if a real estate seller enters into a contract with a particular buyer and stops soliciting other buyers, they can lose out on opportunities if that buyer suddenly backs out of the deal.

To protect buyers while also protecting the interests of sellers, many real estate contracts in California have one or more “escape clauses”. These escape clauses allow the buyer to withdraw from the transaction if certain circumstances arise and the seller has proper notice that the contract is contingent upon these clauses.

E-Commerce – How do I do Business Online?

December 2, 2016 | Structure Law Group, LLP

Businesses are moving away from the traditional storefront and are instead setting up shop online. Both the internet and apps connect individuals across the globe, providing businesses with greater and more innovative ways to reach new customers. For example, on Black Friday 2016, the busiest shopping day of the year for most retailers, online sales rose 21% year-over-year for a total of $3.34 billion. A full one-third of that figure was just from mobile sales. On Cyber Monday 2016, the largest online shopping day, online sales rose over $3 billion with 26% of sales just from mobile devices.

As a greater number of businesses devote their focus to the development of an online presence and using e-commerce to conduct their business, businesses must pay more attention to properly establishing and operating their online business.

Starting Your Business

What is an Apostille? Using Documents in a Foreign Country

June 10, 2016 | Mark Figueiredo

It is not uncommon for businesses in today’s global economy to engage in international transactions. More often than not, these transactions require an exchange of business and/or legal documentation. Although these documents are signed and exchanged by those who have been engaged in business together, there are times when the documents must still be authenticated in order to be used in a foreign country from which the document originates.

The Hague Convention of 1961 established a certification to authenticate documents to be used in foreign countries. This certification is known as an apostille. The apostille is attached to the document that is being sent overseas and it certifies the authenticity of the signature of the documents; it does not actually certify the contents of that document. The apostille is required to be used by a designated verifying authority in a country party to the Hague Convention.

Apostille Requirements

Letter of Intent for Mergers and Acquisitions

May 6, 2016 | Mark Figueiredo

In a corporate merger or acquisition, it is important to ensure that both companies involved are on the same page early in the process. Mergers and acquisitions can be complicated and can require costly resources, so it is important to know what each party is prepared to offer before moving forward with the transaction. One way to ensure both parties are on the same page is to draft a letter of intent (LOI), which outlines the deal points of the merger or acquisition and serves as a type of “agreement to agree”.

The LOI should be carefully drafted by the purchasing company and submitted to the selling company and should set out important basic terms of the transaction. This letter is typically not viewed as a binding contract though that does not mean it should not be given careful consideration. When submitting an LOI, the buyer should put forth attractive though realistic terms. If it fails to do so, it could result in a breakdown in negotiations or a later legal dispute if the expectations set out in the LOI were not in good faith. On the other hand, the purchaser should fully realize that an LOI does not represent the final agreement and that the terms of the deal may change after due diligence is conducted. Because of the importance of an LOI to a merger and acquisition, you should always seek assistance from an experienced M&A attorney when drafting, reviewing, or negotiating the letter.

Provisions to Include in a Letter of Intent

Paying The Right Price When Acquiring A Business

April 15, 2016 | Mark Figueiredo

An important step in the business acquisition process is determining the true value of the business to ensure you are paying an appropriate price. Valuation of a business can be complicated and can depend on the type of company in question, your goals, and many other factors. While this process may seem daunting, an experienced business lawyer can help to identify steps to take and help you decide whether a price is right. The following are some of the issues to consider when evaluating the price of an acquisition.

Examine the Current State of the Business

There are many aspects of a business that should be closely examined before an offer is made, including, but not limited to:

I Want to Protect My Startup’s Reputation. Are Non-Disparagement Clauses an Option?

March 11, 2016 | Mark Figueiredo

Reputation can help make or break a startup. Startups rely upon a positive reputation to grow, develop, and maintain a strong customer base. Glowing reviews help startups strengthen their brand equity; at the same time, they help support and influence a customer’s decision to use the startup’s product or service.

A startup that develops a negative reputation will not have the same luck. Customers that leave negative reviews weaken the perceived value of the startup’s product or service. Potential future customers may find themselves less inclined to use the product or service as a result of negative reviews. Too many potential reviews could spell a startup’s demise.

Startups want to succeed. Whether the ultimate goal is to grow and expand or to be bought out, startups want to ensure that their success is not derailed through customer disparagement. In order to combat potential negative reputation, some startups began including non-disparagement clauses in their purchase or licensing agreements.

What Does a Corporate Board of Directors Do?

January 8, 2016 | Mark Figueiredo

Very generally stated, the Board of Directors of a California corporation is responsible for the way in which the corporation is run. California law requires every corporation in the state to have a board of directors and, according to the text of the law, “all of the activities and affairs of a corporation shall be conducted and all corporate powers shall be exercised by or under the direction of the board.” While this may make is seem as if a company’s board of directors participates in the everyday management of the business, this is usually not the case, and corporate boards regularly delegate management of a business to individuals who may or may not be a member of the board.

How is a Board of Directors Formed?

When a company incorporates, it is required to file a document called “articles of incorporation” with the Secretary of State’s Office. This document establishes much of the basic identity about a corporation, including its name, how much stock it will issue, and the way in which the board of directors will be chosen. California law requires that every board of directors has a chairperson or a president (or both), a secretary, and a treasurer or chief financial officer (or both), as well as any other named officers that may be required by a corporation’s bylaws.

Mechanics Lien Law basics for Owners, Contractors, and Subcontractors

December 4, 2015 | Structure Law Group, LLP

Too often, a contractor, subcontractor, laborer, or material supplier on a construction job does not receive the compensation they deserve for the work they have performed or supplies they provided for the project. Fortunately, California law provides a method by which contractors and others can pursue adequate payment. If the job is a private construction project, a primary tool for receiving payment is the mechanics lien. The following are some brief explanations for frequently asked questions amount mechanics liens in California.

What exactly is a mechanics lien?

A mechanics lien is a tool that creates a security interest in the property on which you worked. After a certain amount of time and if payment is not received from the property owner, you can then sue to foreclose on the lien to satisfy the lien amount.

Legal Considerations for Internet-Based Businesses

July 10, 2015 | Mark Figueiredo

The robust expansion of the Internet and increased accessibility of Internet-enabled devices has provided entrepreneurs and existing businesses an easy and relatively inexpensive way to reach millions of people. One only needs to look the meteoric rise of companies like Amazon and Netflix to see the growth potential of an Internet-based business. In fact, many types of businesses which once were required to have a bricks-and-mortar presence can now operate solely online, significantly cutting their overhead costs. One only needs to look at the rise of companies like Amazon and Netflix to see the growth potential of an Internet-based business.

Because of this potential, more and more people are choosing to start their own online business selling goods or services to people around the country and even the world. While the Internet has removed many of the barriers of entry that have traditionally kept many people from starting a business, it has also created significant and new legal issues that business owners must consider before building a website and selling their product. It is for this reason that anyone considering starting an online business should discuss their situation with an experienced lawyer. Some of the more important issues related to starting an online business are discussed below.

Type of business entity

How can a Shareholder Rights Plan Prevent a Hostile Takeover?

June 12, 2015 | Mark Figueiredo

The possibility of a hostile takeover is a very real concern for many publicly traded companies. A hostile takeover can occur in a number of ways, but one of the most common is purchasing enough stock on the open market to obtain a controlling majority. The main characteristic that defines a corporate takeover as “hostile” is the fact that the transaction is opposed by the target companies’ management.

In many cases, a shareholder rights plan, often referred to as a “poison pill,” is an extremely effective tool to prevent hostile takeovers of publicly traded corporations. Basically, these plans trigger rights for existing shareholders that, when exercised, make the potential transaction much less attractive for a potential buyer. As a result, potentially hostile acquiring parties are then economically incentivized to negotiate with the target company’s board of directors, strengthening the target’s bargaining position.

While there are many potential types of shareholders rights plans, two of the most common are “flip in” and “flip-over” plans, which are detailed below.