The Canal Street Blog

Business-focused legal discussion


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This post discusses five key securities-related issues for merger and acquisition transactions.

In business acquisitions, and especially in business acquisitions structured as stock purchases, there are a number of securities issues you’ll want to be on the lookout for. For the purposes of this post, you can think of a security as the stock or other equity interest in a company like an option or warrant. (You can check out this post for a more detailed discussion of what a security is.) Below I’ve listed 5 key securities-related due diligence issues for you to consider when purchasing a business.

We’ll start with the two key issues that are important for acquisitions of both stock and assets; we’ll finish with three key issues that primarily affect stock acquisitions:

Issues for acquisitions of either stock or assets

Two issues are of…

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M&A Securities Issues

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In today’s blog post, we review employer policies regarding parental leave and discuss what businesses can expect in the future.

We’ve been reading the business news surrounding companies increasing the parental leave they offer their employees. In today’s blog post, we take a more in depth review of the trend locally, discuss what businesses can expect in the future, and remind employers to understand applicable law before developing their parental leave policy.

Parental Leave in the News

Washington tech giants Microsoft, Amazon, and Zillow have recently announced plans to increase their parental leave. Microsoft now offers 12 weeks of fully paid parental benefits to all new mothers and fathers. Amazon also introduced a revamped parental leave policy. Amazon will offer birth mothers up to 20 weeks of leave. Amazon has also introduced a shared leave program; employees whose partners do not receive parental leave…

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Parental Leave

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The latest post in the Understanding Your Commercial Lease series discusses Damages, Destruction, and Business Interruption.

This latest post in the Understanding Your Commercial Lease series discusses damages, destruction, and business interruption. The damages and destruction provisions of your commercial lease will detail who (between the tenant and landlord) will be responsible for damages to (or destruction of) the premises, the building, and the entire real estate complex. Business interruption is often closely associated with damages and destruction as those events often interrupt the tenant’s business, but business interruption can also come about in the context of repairs, maintenance, and utility-related issues. The language in your commercial lease that discusses “smaller” damages is often included in the repairs section of the lease, and the destruction clause (sometimes called the “casualty” clause) will generally cover major damages.

Damage

Damages…

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Damages

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We continue our hedge fund series by discussing the definition of "accredited investors," and why it is important to your hedge fund.

We are continuing our series on understanding hedge funds; we will be discussing the definition of “accredited investors” and why it is important to your hedge fund.

As a brief primer, you should know that all hedge funds considering a securities offering must comply with federal and state securities laws. The Securities Act of 1933 and 1934 (“Acts”) were put in place to protect investors after the market crashed in 1929, and prior to this point in time, securities were chiefly governed by state law (which still applies in may situations). The two main objectives of the Acts were: 1) to require that investors receive significant (or “material”) information concerning securities being offered for public sale; and 2) to prohibit deceit, misrepresentations, and other fraud in…

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Accredited Investor

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In today’s post we’ve highlighted the key issues you’ll want to consider when forming a Washington corporation.

A few weeks back, we provided a checklist for forming an LLC. In today’s post we’ve highlighted the key issues you’ll want to consider when forming a Washington corporation.

Check the Business Name. As we mentioned with LLCs, you’ll want to make sure the name you want for your corporation isn’t already registered with the Secretary of State (which you can check here). For corporations, you’ll need to include some reference to the fact that the company is a corporation, such as “Inc.” “Corp.” or “Co.”

Articles of Incorporation. The “Articles of Incorporation” is the document you file with the Secretary of State in order to form your corporation. This document must include (at the bare minimum) the name of the corporation, the…

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Building a house

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In today's blog post, we discuss how you can dissolve your Washington business entity.

If you’ve decided to move on from the business you’ve started and it doesn’t make sense to sell it, you’ll likely want to dissolve your Washington business. To do so, you’ll need to consider the following steps:

Dissolving a Corporation 

To voluntarily dissolve a Washington corporation, generally the corporation’s board of directors will propose dissolution and submit the proposal for a vote by the shareholders. Two-thirds of the authorized shareholders then must approve the proposed dissolution. The initial directors, incorporators, or board of directors may also dissolve the corporation by majority vote under certain circumstances, like when no shares have been issued.

Following the vote to dissolve, the corporation must file Articles of Dissolution with the Secretary of State to notify the state of the corporation’s intention to…

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Office building door

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In this blog post we take a look at pending legislation that would create a new statutory securities exemption for the resale of private stock.

The US House of Representatives approved a bill, which if passed by the Senate and signed into law by the President, could make it easier for people to resell private stock. If you’re lucky enough to be an investor in Airbnb, Uber, or some other startup that took off but hasn’t yet gone through an IPO, how do you turn your private stock into cash? It can be tougher than you might think. As a general rule, every offer and sale of a security must be registered or exempt from state and federal securities registration requirements. This includes the resale of private securities, meaning if you have shares of Airbnb or Uber, you have to make sure you’re not violating state or…

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Public Companies Chart

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News Roundup

 

What we’ve been reading this week at InVigor:

Federal government preparing to forgive billions of dollars in student loans to doctors and white-collar Americans under debt forgiveness law

How to win an argument at Thanksgiving dinner like a trial lawyer

Why Uber is not the future of work

French couple sues Airbnb for copying their apartment

Tesla recalls 90,000 sedans due to one European customer’s seat belt issue

Research shows that eating together can enhance performance. Looks like lunch is on the company!

Photo: Islxndis | Flickr

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News Roundup

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The latest post in the Understanding Your Commercial Lease series discusses utilities, maintenance, and repairs.

To understand the true cost of your commercial lease, you have to understand what utility services you’re responsible to provide and what parts of the premises you are required to maintain and repair. The discussion of utilities, maintenance, and repairs overlaps to some extent with what we discussed in our earlier common area maintenance and other pass through provisions post in the Understanding Your Commercial Lease Series. Common area maintenance provisions deal with some similar utilities, maintenance, and repair related issues. But the utilities-specific section and the maintenance and repairs-specific sections in your commercial lease will detail exactly what the tenant is required to do to maintain its utilities and the leased premises, including the extent to which the tenant is responsible…

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Utilities, Maintenance, and Repairs

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In today's post, we provide a Washington LLC Formation Checklist that includes the major steps to form your LLC and start doing business in Washington.

The Washington Secretary of State has created a streamlined process for businesses to create limited liability companies. If you’re forming a LLC in Washington, the following Washington LLC formation checklist might be helpful to review to ensure you consider the steps for proper LLC formation:

1) Check the Business Name. Before settling on a business name, you’ll want to make sure that the name is available and conforms with statutory requirements. An easy way to check if your name is available is by running a business search here.

2) Certificate of Formation. Prepare and file the Certificate of Formation with the Secretary of State to “create” the LLC. You can file the Certificate of Formation online here. When you file your Certificate…

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LLC Checklist