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Meetings & Minutes: Records and Filing Requirements for Business Entities (Texas and Delaware)

So, you formed a new business entity – congratulations! Voting, management, distribution, liquidation, and other rights are established in the operating agreement, corporate bylaws, partnership agreement, or whatever other type of governing documents exist for your entity. Those types of documents generally deal with administration and governance matters from a high-level procedural standpoint, things like: How do you provide notice of meetings? How are votes taken? What percentage vote is required to approve actions (ordinary [...]

Meetings & Minutes: Records and Filing Requirements for Business Entities (Texas and Delaware)2018-03-30T00:20:16-06:00

Seriously?!? Smart Contracts Won’t Get Rid of the Corporate Lawyers Either? What Do We Have to Do?

In 1995, I was accepted to law school. Only one week earlier, I was offered a promotion at my current job. When I told the hiring manager I was declining the offer and leaving to attend Harvard Law, she said, “You’re leaving here to become a lawyer? That’s crazy. There’s no future in law.” I suspect she knew what she was saying was ridiculous, but felt obligated to take her best shot at keeping me [...]

Seriously?!? Smart Contracts Won’t Get Rid of the Corporate Lawyers Either? What Do We Have to Do?2018-02-06T15:56:10-06:00

Tax Benefits of an S-Corporation

An S-Corporation Isn’t a Type of Entity As a business attorney, I am often asked by founders launching a new business or startup if they should form an S-corporation. They often approach me for advice while deciding between a C-corp and an S-corp (or between an LLC and an S-corp). One point of clarification, which is a bit technical, although helpful for understanding how to navigate the world of law and tax, is that S-corporations [...]

Tax Benefits of an S-Corporation2017-12-05T19:29:44-06:00

Regulation CF (Equity Crowdfunding) for Startup Founders and Investors

Private Company Stock Investing: Until Recently, Limited to Accredited Investors For most investors, investing in stocks starts and ends with public stocks – stocks that are traded on a national exchange, such as the New York Stock Exchange or the Nasdaq Stock Market. The reason for this is that investing in private company stocks (and other securities) has long been off limits to small time retail investors (as opposed to institutional investors, such as private [...]

Regulation CF (Equity Crowdfunding) for Startup Founders and Investors2017-11-21T20:10:40-06:00

Does Forming an LLC or Corporation Fully Protect You From Liability?

The Value of a Limited Liability Entity Generally You have probably heard that you need a limited liability business entity (corporation, LLC, etc.) to protect you from personal liability. There’s a well-known company that runs ads on the radio often. The company provides incorporation services. They’re not a law firm, they just file papers to form corporations and limited liability companies (that may be their exact words, actually!). Their ads sell fear – fear of [...]

Does Forming an LLC or Corporation Fully Protect You From Liability?2018-06-29T19:58:29-06:00

7 Mistakes to Avoid When Buying a Business (An M&A “How-To”)

Buying an existing business (along with selling businesses, this is known as “mergers & acquisitions,” or just “M&A”) is a great way to buy into a new business or expand your existing business. From an expansion standpoint, in fast moving markets or industries that are tough to penetrate because the market leaders are well-entrenched, buying your way in may be the obvious preferred choice compared to starting from scratch or growing your existing business organically. [...]

7 Mistakes to Avoid When Buying a Business (An M&A “How-To”)2020-11-30T17:17:28-06:00

83(b) Elections – A Critical Startup Founder Tool

As a business lawyer based in Austin, with clients throughout Texas, Delaware and other states (even a couple in other countries), a large part of my legal work involves technology startups – companies where founders put in very little money, raise a few rounds of angel investment and venture capital over a few years, and aim to scale their startup from the garage to an IPO or lucrative exit through a merger or acquisition (M&A). [...]

83(b) Elections – A Critical Startup Founder Tool2021-02-05T14:26:14-06:00

What Information is in a Private Placement Memorandum (PPM)?

I spend a lot of my securities law practice advising savvy startup owners and seasoned entrepreneurs on the most effective methods for structuring their companies in a way that both satisfies the law and positions their businesses to successfully raise investment capital. When raising capital, many of these owners and entrepreneurs decide they should (or need to) go the route of using a private placement memorandum (PPM) to inform potential investors about the structure of [...]

What Information is in a Private Placement Memorandum (PPM)?2020-11-30T17:07:34-06:00

The Regulation of Cryptocurrencies and Initial Coin Offerings (ICOs) Under Traditional Securities Law

On July 25, 2017, the Securities and Exchange Commission (SEC) issued a long-awaited (by securities lawyers like myself, at least) ruling on initial coin (token) offerings, specifically a token offering launched in May 2016 by an organization called The DAO (decentralized autonomous organization). The SEC’s decision regarding the DAO is not surprising from a traditional securities law perspective, although their analysis and supporting statements carry significant insights into where this innovation vs. regulation battle is [...]

The Regulation of Cryptocurrencies and Initial Coin Offerings (ICOs) Under Traditional Securities Law2018-01-29T15:58:05-06:00

What Exactly is an S-Corporation?

https://youtu.be/Z10a_AiMJIE Many entrepreneurs and startup founders think they need to decide between forming an S-Corporation (S Corp) or a C-Corporation when they start a new business. This is a misconception. S-corporations are not their own type of corporation. They are not their own type of entity. You don't go to the secretary of state and form an S-corporation. What you do is form a corporation or Limited Liability Company and then you approach the [...]

What Exactly is an S-Corporation?2017-10-10T20:38:10-06:00