The Canal Street Blog

Business-focused legal discussion

Washington State Paid Family and Medical Leave

In this blog post, we'll discuss how the new Washington paid family and medical leave act will affect businesses, big and small.

  Charlene Angeles Washington State has passed a bill that grants paid family and medical leave to eligible employees. We explain how it works, how it will be funded, and how it will affect small businesses....

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Intrastate Securities Offerings Under 3(a)(11) and Rule 147 & 147a

Today’s post highlights the federal securities law exemption for intrastate securities offerings made pursuant to rule 3(a)(11) and rules 147 and 147a.

  Gavin Johnson

As we’ve discussed previously, the Securities and Exchange Commission (SEC) is the governmental body responsible for the regulation and enforcement of federal securities laws that govern both interstate securities offerings and intrastate securities offerings. These laws are detailed in, among others, the Securities Exchange Act of 1933. The SEC is primarily concerned with regulating securities transactions that take place on a large scale (generally interstate), and so the ‘33 Act provides for an exemption from registration for intrastate securities offerings. Today’s post discusses the federal exemption for intrastate securities offerings under Rule 3(a)(11).

For purposes of this post, when we refer to “selling securities” we’re generally referring to companies raising investments under either equity or debt instruments. Here’s a prior post...

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Friends and family financing round: Raising capital from non accredited investors

Is raising money from non accredited investors worth the costs and risks? We take a look at the options for the friends and family financing round.

  Kyle Hulten Is the family and friends round worth the costs and risks? After discussing the pros and cons with us, entrepreneurs often decide against raising money from family and friends. In today's post we'll talk about six different ways you could raise money from family and friends. ...

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Major Issues to Consider When Drafting or Reviewing a Non-Disclosure Agreement (NDA)

This post discusses the non-disclosure agreement and how parties can use the NDA to help avoid losing control of their intellectual property.

  Gideon Dionne

A non-disclosure agreement, or NDA, is an agreement that is meant to protect a party (or both parties) from losing control over all or parts of their valuable intellectual property. The NDA prevents one party from disclosing certain information belonging to the other party without permission. By preventing disclosure without permission, a party can maintain the value inherent in keeping certain intellectual property a secret from the outside world while still sharing that intellectual property with those who might help them build on it (or who might purchase the right to use it). But a non-disclosure agreement not thoughtfully considered can become a license for the other party to destroy or significantly diminish the value of your intellectual property. Here...

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The Business Purchase Letter of Intent

Today's post discusses an important preliminary step when you are purchasing a business’s assets or stock: drafting a business purchase letter of intent.

  Gideon Dionne

Today’s post discusses an important early step when you are purchasing a business: drafting and negotiating a business purchase letter of intent. The process of drafting and negotiating a business purchase letter of intent generally follows the initial negotiation of the major business purchase terms. Those material terms—price, payment method, closing timing, and basic conditions to the sale—are generally negotiated directly between the parties on smaller business purchase and sale transactions. On larger transactions, the parties and their brokers and investment bankers negotiate those terms.

After you agree on what each party is going to do as part of the business purchase, one party (often the buyer) will distill those main business terms into a written document that is the business purchase letter of intent....

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Many Startups Are (Unintentionally) Breaking These Wage Laws

Washington State requires all businesses to meet minimum wage requirements. We discuss what they are, possible exemptions, and how to avoid complications.

  Gavin Johnson

Since most startups don’t have a large reserve of cash during their early days, it is common for startups to compensate founders and early employees solely with equity. While this allows startups to conserve what little cash they have, this practice could ultimately be very costly for the company if it runs afoul of wage laws. In today’s post, we discuss various ways that startups may expose themselves (and in some cases their founders, directors, and officers) to liability for violating wage laws, and some steps companies can take to limit that liability.

While the attorneys in our firm do not practice employment law specifically, we come across these issues frequently when working with startups and think it is something founders...

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