Entrepreneur Guide to Business Law

8/14/2019 Entrepreneur Guide to Business Law

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Entrepreneurs Guide to Business Law

1. Taking the plunge

a. Who owns the technology

b. What should a entrepreneur do make the departure from company

amicable

c. Can you ask co-workers to join new enterprise

d. Should he hire attorney, budget

e. Choosing the legal form of business, tax standpoint

f. How should he split the equity among founders

g. How will he manage the venture?

h. Adv/disadv of board of directors? Who?

i. Options of financing the new venture?

j. Ensuring that customers pay on time & suppliers are paid on time?

k. Warranties implied in selling the product?

l. Minimum wages, overtime, ssn, taxes, insurance

m. Leasing vs. buyingn. Operational liabilities & insurance

o. What happens if company runs out of cash or cant pay off its debts.

p. How to seek venture capital

q. Protecting IP

r. Market: domestic vs. international

s. Going public

2. Leave your employer

a. Position with the company

b. Type of new venture non-competingc. Solicitation of co-workers

d. Post-employment restrictions & covenant not to compete

i. Anciliary to another agreement

ii.Legitimate interests

iii.Limited in scope

e. Interest of public

f. Trade Secrets : information that is not generally known

i. Misappropriation of trade secrets: NDA

ii.Criminal liability

g. Invention Assignment Aggreement & Works for hire: assign all

invention to employer

h. Strategies for leaving on good terms

3. Deciding whether to incorporate

a. Partnership agreements & mechanics

b. Tax treatments

c. Selecting a C corp, S corp, Partnetship


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vi.Checklist for contract analysis

g. Effect of bankruptcy

h. Remedies: monetary damages, non-monetary equitable damages

i. Promissory estoppels, quantum meruit, leases

j. Contract for the purchase of real property

k. Loan agreements

8. E-commerce & Sales of goods and services

a. Article 2 of Uniform Commercial Code( sale of goods)

i. Definition of goods, contract formation, battle of forms, statute

of frauds

ii.Article 2 Warranties: Express warranty , Implied Warranty of

merchantability/of fitness, limiting liability & disclaimers

iii.Magnuson-Moss Warranty act: to protect consumers against

deception in warranties

b. Electronic contracts

i. E-sign act & Uniform Electronic transaction act.

c. Strict liability for defective products

d. Successor liability: in case of company merger

e. Privacy laws

f. Unfair competition

g. Jurisdiction, settling online disputes in offline courts

9. Marshaling human resources

a. Employees vs independent contractors

b. Employement legislations:

i. Title VII of civil rights act of 1964: disparate treatment, disparateimpact, harassment, bonafide occupational qualification,

seniority & merit systems, age discrimination in Employment

act, disabilities act, family & medical leave laws,

c. Prehiring practices

i. Job advertisements

ii.Applications & interviews

d. Employee privacy, monitoring of employee email, limitations on use of

employee health information

e. Employement at will and wrongful discharge.

f. The employment agreement: duties, compensation, benefits, stockoption & grants, duration & termination of employement, right to work

in US, proprietary information & inventions agreements, non-

competition clauses

g. Insurance, health, anti-discrimination

10.Operation Liabilities & Insurance

a. Negligence


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i. Duty, standard of conduct,

ii.Defenses t onegligence: contributory vs comparative

b. Intentional torts:

i. Torts that protect people :battery (contact of harmful substance

with plaintiffs body), false imprisonement, intentional infliction

fo emortional distressii.Torts to protect interests in property: trespass to land, nuisance (

public & privance), conversion( control over left alone property)

iii.Torts that protect business interests & economic interests:

fraudulent misrepresentation , interference with contractual

terms, unfair competition

c. Strict liability: ultra-hazardous activities

d. Toxic Torts: wrongful act that causes exposure to harmful substance

e. Tort Remedies

i. Actual damages, punitive(exemplary) damages, equitable relief

f. Tort Liability of Multiple defendents

i. Joint or several liability

ii.Contribution or indemnification

g. Antitrust violations

h. Environmental liabilities

i. Bribery & foreign corrupt practices act: bribery, record-keeping

provisions

j. Tax Fraud

k. Wire & mail fraud

l. Obstruction of Justice & Retaliation against whistleblowers

i. Computer crime & CFAA( computer fraud & abuse act)

ii.Insurance, implied duty of good faith & fair dealing

11.Creditors rights & bankruptcy

a. Types of loans: term loans, revolving loans, secured loans

b. Loan agreements

c. Secured transactions under UCC: terminology, scope of article 9,

formal requisites

d. Security Agreement: parties, granting clause, description of collateral,

after-acquired property, proceeds

e. Debtors obligation: Cross-collateralization, remedies for default

f. Perfecting a security interest: by possession, by filing, by control,automatic perfection

g. Types of creditors & their rights: secured creditors, unsecured trade

creditors, equiptment lessors, taxing authorities, employees

h. Personal guaranties

i. Strategies for responding to a financial crisis

i. General considerations

ii.Out-of-court reorganization


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iii.Out-of-court Liqidation

iv.Secured creditor & Foreclosures

j. Types of Bankruptcy

i. Chapter 11 vs Chapter 7 liquidation(straight)

ii.Voluntary versus involuntary bankruptcy

k. Chapter 11i. Costs of bankruptcy, automatic stay, types of creditors in

bankruptcy, payment priority, executor contracts & leases

ii.Exclusivity period, classification of claims, unasserted

contingent & unliquidated claims, plan volting requirements,

cramdown issues & absolute priority rule

l. Running a business in bankruptcy

i. Cash collateral, post-petition financing

12.Intellectual property & Cyberlaw

a. Trade secret protection

b. Enforcing trade secret rights: establishing a trade secret protection

program, pre-employment clearance, NDA, Non-competition

agreements, employee education, exit interview/agreement, building

security

c. Copyirghts: gives the owner the exclusive legal right to obtain certain

economic benefits from work, fair use, duration of copyrights

d. Proving copyright infringement: direct, vicarious, contributory

e. DMCA

f. Patents: types- utility patents, design patent, the statutory bar: patent

will be denied if its is disclosed 1 year before the application is filed,

duration: utility:20, design:14 years

g. Trademarkes: name, phrase, symbol that makes u distinguishes uh. Licensing: what is to be lincensed, covenants, scope of license,

payments, Shrink wrap(packaging) licenses & click wrap(I Accept)

lincenses, Importance of due diligence, technology & human capital

13.Buying & Selling a business

a. Business combination(instant cash, limited returns) vs IPO

b. Forms of business combinations: Asset Purchase( with liability),

Purchase of equity(no liability)

c. Tax treatment: taxable purchase & sales of assets, taxable forward

merger, taxable urchse & sale of stock, taxable reverse triangular

merger

14.Going Public

a. IPO vs Sale of company

b. Is the company a viable IPOs candidate?

c. IPO process:


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i. preliminary prospectus, due diligence, road show, pricing

committee, final prospectus

ii.selecting the managing underwriters: lead underwriter & co-

managers, firm commitment offering/best effort offering,

syndicating & gross spread, beauty contest or bake-off(

selecting the underwriter after presentations)iii.participants: companys management, underwriters, companys

counsel, underwriters counsel, companys independent

accounting firm(auditors)

iv.due diligence

v.determination of stock price & offering size

vi.confidential treatment of material agreements

vii.Exchanges, NASDAQ, Blue sky laws

viii.SEC Comments, The Road Show, Delayed or Terminated

Offerings

ix.Pricing, Commencement of Trading & Directed shares, The

closing, Restriction on sale of shares, Lock-up agreements,

trading of stock not issued in public offering of rule 144,

contents of prospectus, liability for misstatement in the

prospectus

x.Preparing for an IPO: prefiling Publicity, postfiling publicity, post-

effective quiet period, board composition, reincorporation in

Delaware

xi.Responsibilities of Public company & its board of Directors:

currents & periodic reports, effect of proxy rules, deirectors

responsibility in a public company, insider trading, safe harbor

for pre-existing arrangements or blind trusts, company liability,liability for short swing profits, insider reports,

xii.Post IPO disclosure, communications with analysts & regulation

FD: disclosure obligations, safe harbor for forward looking

statements

Documents

Entrepreneur Guide to Business Law