Category Blog

Many individuals and business owners operate under the incorrect assumption that when looking to raise capital, they can simply sell securities to any person on the street. However, the general rule is that any public offering of a security must be registered with the SEC, unless an exemption exists.

For many small businesses, registration with the SEC is not feasible due to the expense. Luckily, several exemptions from registration are offered. Some of the most common exemptions are found under regulation D (specifically Rule 506, which is a Safe Harbor under Section 4(a)(2)). Yes, it’s confusing. A Private Placement Memorandum (or PPM) is a document that businesses use to take advantage of such exemptions.

Read on to learn more about PPMs and how they can benefit your business when raising capital.

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Search Google for the best legal entity for your new startup, and you will get different opinions. Startup advisors and CPAs will probably recommend a limited liability company (LLC). That’s because an LLC isn’t subject to double taxation and is easier to set up.

On the other hand, many startup lawyers will recommend the C-Corporation structure (typically a Delaware C-Corp) because corporate law is typically more “stable,” equity (stock) ownership is passive, and the entity is more structured.

How you choose to incorporate your startup business will have massive implications down the road. This blog explores the basic advantages and disadvantages of each option.

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Anyone starting a new business is faced with a lot of decisions. Arguably the most important is choosing the business entity type and tax status. Business lawyers and CPAs will present entrepreneurs with several options to choose from depending on the legal entity, including “S” election. 

Each type of legal entity has its benefits and limitations. Technically, there’s no legal entity called an “S-Corp.” A company that makes an “S” election for tax purposes is typically referred to as an S-Corp. However, various types of legal entities including LLCs and Corporations can elect S-Corp status. This blog will discuss the benefits of “S” election.

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Raising capital is among the top priorities of startup companies. As a result, startups receive money from investors in various ways. One of those ways is through a Simple Agreement for Future Equity (SAFE). A Silicon Valley accelerator, Y combinator, created this document in 2013 to allow startups to structure seed capital without interest or maturity dates. Specifically, a SAFE is a legally binding contract that permits an investor to buy shares in a company for an agreed-upon price at some time in the future.

As you consider your options to seed your startup, you should understand the benefits and disadvantages of SAFEs and how they differ from convertible notes.

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If you are a start-up founder or business owner, you may wonder whether the special practices or proprietary information that make your business unique qualify as trade secrets under state or federal law. In this blog, we’ll provide five questions to ask, to determine if you have a protectable trade secret.

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Hiring independent contractors is a great way to fill in gaps in your business, especially when you need a short-term solution to fill in those gaps. A 1099 independent contractor, unlike a full-time W-2 employee, is typically contracted for specific tasks at specific times. In addition, they may work with other clients while working with you. Typically, you will have less control over how and when the contractor accomplishes a task–but can control the result.

Is hiring an independent contractor right for your business? Make sure you’re considering these key tips as you put together your contracts. 

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