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When should your business think about repurchasing shares? This article helps clarify the thought process behind the answer to that question, with an explanation of the economics of share repurchasing, some points about when share repurchases...
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This article surveys current news and highlights several business news stories involving executive pay from across the globe. The article looks at current trends in American executive pay in light of the stagnation of the middle class and...
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A poison pill is a corporate governance device which has the practical effect of giving a corporation's board of directors the final say over any takeover attempt. Many regard poison pills as friendly to boards of directors and contrary to...
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A poison pill is a corporate governance mechanism which serves to make the corporation adopting the poison pill prohibitively expensive to acquire absent the consent of that corporation's board of directors. This article reviews the facts...
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This article analyzes JP Morgan's recently announced huge trading loss to illustrate how Delaware courts analyze whether directors fulfilled their duties to oversee the business and affairs of the corporation; since most corporate law rules apply to...
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This article reviews the federal rules surrounding deferred compensation paid to either employees or independent contractors. It highlights the distinction in the Tax Code between qualified and nonqualified deferred compensation plans and...
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One of the legal responses in the wake of the financial crisis was to mandate that the SEC provide awards to individuals who report violations of the federal securities laws at their companies. This article examines how Dodd-Frank mandated this...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include evidence of continued growth in CEO pay packages, hiring trends in the U.S....
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include a notice by the SEC that crowdfunding is not yet legal, Google's answer to...
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One of the many changes to corporate governance in the wake of the financial crisis was to give public company shareholders a (non-binding) "say-on-pay" vote, which would allow them to periodically vote for or against a company's executives'...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article focus heavily on securities matters and corporate finance, such as the structure...
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Boards of directors owe fiduciary duties of care and loyalty to common stockholders. Of course, many investors in startups take preferred stock, not common, which makes the question posed by this article especially acute in the startup...
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This article represents the final entry in a series exploring and explaining important provisions in financing term sheets by briefly detailing a grab-bag of provisions commonly found in such documents. Provisions so reviewed in this article...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include the SEC's forthcoming rulemakings under the JOBS Act, Viacom's victory on appeal...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include the passage of (and commentary on) the JOBS Act, a potential kerfluffe involving...
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The CROWDFUND Act (full name: "Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012") was part of the Jumpstart our Business Startups Act which just passed Congress, and which dealt specifically with creating a...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include both houses of Congress's passage of the JOBS Act, Zynga's initial public...
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Because corporate executives are vested with such great power to guide and direct the operations of a business, they can create--or destroy--a great deal of value for the businesses they lead. This article kicks off a series looking at an...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include the likelihood of passage of the Senate's version of the JOBS Act, a new...
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This article examines how a corporation's board can create a committee and assign some portion of the board's authority to such a committee. The article explains the roles of the corporation's bylaws and charter in setting the rules governing...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include sanctions for private sales of securities, an employment law case in California,...
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This article reviews the basics of board committees. Board committees are essentially subsets of a company's board of directors which focus on a specific, narrower set of tasks than a full board. This article specifically focuses on the...
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This article reviews new developments in the legislation enabling social purpose corporations in Washington (state). The article notes the progress of the legislation enabling these corporations, and reviews prior literature detailing how these...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include developments in a major M&A transaction, executive compensation at Microsoft,...
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Director and officer indemnification and advancement are important corporate governance issues, because how states answer them determines the pool of candidates from whom the overseers and managers of that state's corporations will be drawn. ...
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When the World Wide Web burst onto the scene in the mid-1990s, it represented quite a shock to the existing system of copyrights, as copyright infringement became far easier and more prevalent. This article reviews a safe harbor for service...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include a criminal copyright infringement lawsuit, an activist shareholder of AOL, an...
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Although countries' corporate governance systems are designed to address similar problems, the details of how they address those problems differs from nation to nation. This article reviews a recent report on trends in Canadian boards of...
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Venture capitalists are arguably more sophisticated investors who take a longer-term view of their investments than most other classes of investors. Records of their deals and opinions on the economy, therefore, carry a great deal of weight...
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This article reviews a dispute between the controlling shareholder block of Wynn Resorts and a minority shareholder who was also a director. As the article relates, the minority shareholder/director was forcibly expelled from the company (and...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include Amazon's decision to pull a publisher's e-books from a specific publisher, a...
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Even the smallest corporations have directors. This article examines the ways you can remove directors. It starts with the general rule (with a focus on Delaware law), reviews the exceptions to that general rule, and then highlights how a...
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This article continues a series explaining key provisions in financing term sheets. This entry in the series focuses on registration rights, which involve when investors can request (or demand) that the company become publicly traded. The...
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Corporate governance matters; although large firms with shoddy governance policies and procedures make headlines, smaller firms can gain a competitive advantage if they are well governed. This article highlights five recent important reports on...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article involve such topics as M&A due diligence, international trademark infringement...
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This article reviews the legal status of takeover defenses in the United States, and explores the tougher question of whether courts here should view corporate takeover defenses as leniently as they currently do. The article examines the...
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The business judgment rule is a vital feature of the corporate law of Delaware (and other states). This article provides an overview of the business judgment rule, with an explanation of what it is, how shareholder plaintiffs in lawsuits...
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This article continues a series explaining key provisions in financing term sheets. This entry in the series focuses on information rights, which help investors monitor the company in which they are investing. The article explains why...
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This article recounts the developments from two prominent news stories involving corporate governance matters. The news stories so profiled involve a binding arbitration clause in The Carlyle Group's IPO, which carried tremendous implications...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include the fate of an IPO restriction which would have negatively impacted shareholders'...
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The stereotypical corporate director, as conceived in law schools across the country, is a successful former or current executive who would just as soon be playing golf or sailing on his yacht as diligently overseeing the operations of the...
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This article shares some important advice for budding entrepreneurs (or anyone in business) from the business book Rework. The advice concerns both work/life balance and practical suggestions for building a lasting, sustainable...
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This article continues a series explaining key provisions in financing term sheets. This entry in the series focuses on conditions precedent to financing. The article focuses on typical conditions precedent to financing and also...
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Every corporation, even the smallest startups, has directors, even if these directors are just (for example) the founder and her husband. However, the right directors can also add significant value to the corporation whose affairs they oversee,...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include Facebook's IPO, Congressional insider trading legislation, Google's privacy...
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This article highlights a creative financing option which can help startups get the capital they need to grow without sacrificing control or diluting the founding team's equity interest in the firm--revenue loans. Revenue loans are instruments...
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This article continues a series explaining key provisions in financing term sheets. This entry in the series focuses on redemption rights, which allow the investor to have the stock repurchased at the purchase price, often after some fixed...
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This article looks at an IPO currently in the preparation stage by The Carlyle Group LP, a well-known buyout firm. The registration statement for this IPO contains a very restrictive arbitration clause, which serves to stunt the threat of...
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This article highlights several news stories with some kind of nexus to a legal topic relevant to startups and small businesses. Topics covered include a big week for Apple, big news in executive compensation, European data privacy legislation,...
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States across the country are adopting laws creating benefit corporations, a new corporate form for socially conscious entrepreneurs. This article highlights an effort underway to pass social benefit corporation in Washington state.
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This article continues a series looking at key investing term sheet provisions. This entry in the series focuses on dividends; the article explains what dividends are, how different types of dividends affect your company's balance sheet, and...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include an update on the SOPA blackout, Google director compensation, an overhaul of the...
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This article reviews important (currently existing) exemptions from federal securities registration requirements. The article focuses on Regulation D, and compares and contrasts the three main SEC-promulgated Regulation D rules under...
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This article continues a series looking at key investing term sheet provisions. This entry in the series focuses on investors' conversion rights, by which they can convert preferred stock to common. The article explains why preferred...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include a petition to remove Regulation D's ban on general solicitation for certain...
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A preliminary step to an initial public offering (IPO) is submitting a registration statement for that stock to the SEC. This article explains what that registration statement contains, explains how burdensome it is to put together, highlights...
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This article discusses drag along agreements (also called drag along provisions, or, to many lawyers, simply drags). It explains what a drag along agreement is, how they work in sales of a company, and also provides some options to make drag...
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This article highlights several big news stories from the last week. The leading story in this roundup concerns President Obama's recess appointment of a head of the Consumer Financial Protection Bureau, a new agency created by the Dodd-Frank...
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This article highlights several prominent news stories with some kind of nexus to legal topics relevant to startups. News stories profiled in this article include the payroll tax cut extension, the Kinect Accelerator, Supreme Court cases...