Launching a startup business with a friend can be an exciting and rewarding experience. However, I suggest you take a moment and really think about what the potential consequences might be. Starting a business is tough and having a friend involved will only make it more difficult if things go sour. Most importantly, your friendship [...]
Fortune Small Business recently ranked the top 10 U.S. states for small business taxation: 1. South Dakota 2. Nevada 3. Wyoming 4. Alabama 5. Washington 6. Florida 7. Mississippi 8. Colorado 9. Texas 10. Michigan While potential tax savings should not be the sole reason in deciding where to start your business, it should play [...]
Running a startup, you have a billion things to do. Don’t forget to add “First Organizational Meeting” to your to-do list. This meeting should take place after the issuance (or effective date) of your certificate of incorporation. But don’t wait too long, as you have some important business to handle, such as: adopting share certificates, [...]
After you have made the decision to incorporate, the next question is “where to incoporate?” You can incorporate in your own state and be considered a domestic corporation, or you can incorporate elsewhere and do business in your own state as a foreign corporation. Generally, if most of your business will be conducted in your [...]
When choosing a name for a new startup, you should make sure the name is one the public will remember and associate with your business. It can be catchy or dull, short or long, but this name should be permanent, as a large portion of your company’s goodwill will be the name itself. Some lawyers [...]
An earnout is the method of paying the seller of a company based on that company’s future earnings. The earnout will call for additional payments to the seller if the company’s post-sale earnings reach a certain level. The earnout is useful when buyer and seller do not agree about the company’s future profit stream. A [...]
As counsel, is it appropriate to speak up if you believe your client is overleveraging to finance an acquisition? Two factors must be considered to answer this question: (1) Your capacity. You are an attorney (not an I-banker). That law-school corporate finance elective or that undergrad finance degree might have defined “leverage,” but it likely [...]
When negotiations need to remain confidential, a letter of intent should obviously include a confidentiality cause. But in the case of startup companies–replete with their fresh and new ideas–a confidentiality clause is a requirement. Information will be exchanged during due diligence and the negotiations, thus the parties should agree on what information is confidential. In [...]
When starting a business, probably the biggest early decision an individual will make is which form of organization is best for his (or her!) business operations. Unfortunately, there is no formula nor book at Barnes & Noble that can magically determine the ‘best’ entity for your startup company. A complex web of tax and nontax [...]
Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. Click here to learn more about his practice.
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