Business Startup

Tie Up Legal Loose Ends Before the End of the Year

As the year comes to an end, it is a good idea for your business to conduct a legal audit to prevent unnecessary risk and expenses in the coming year. A few minutes now can save you substantial cost and trouble later. Here are a few things your business should consider doing before the new year:

Dissolve any inactive businesses There’s no need to continue to pay filing fees to maintain business licenses and permits for a business entity you are no longer using. To dissolve your business, you’ll need to file Articles of Dissolution with the Secretary of State to notify the state of your intention to dissolve the company. There’s no filing fee in Washington (unless you want expedited service)...

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Contracts

How Can A Simple Noncompete Agreement Benefit Your Business?

Two of the most valuable assets of your business are the goodwill and the intellectual property that you’ve developed. A noncompete agreement can be instrumental in protecting these aspects of your business from a wide range of problems with departing employees, including the spread of trade secrets and other confidential information to your competitors. Today’s post will discuss the legal requirements you should keep in mind in order for your noncompete to be enforceable, and some of the potential benefits of using a noncompete agreement in your business.

Setting the Stage At some point during the life of your business, you will likely need to recruit, train, and rely on employees to help grow (or simply maintain) your business. You’ll have to...

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Mergers & Acquisitions

Due Diligence | Part 1 | An Introduction to the Series

“By failing to prepare you are preparing to fail.” This great Benjamin Franklin quote is a helpful point of reference for understanding why due diligence is so important  in the purchase and sale of a business. The buyer needs to make sure he or she knows exactly what he or she is purchasing. Due diligence offers the purchaser an opportunity to get to know the seller’s company and avoid being caught off guard by an undisclosed or undiscovered issue after the company is acquired. If the buyer fails to thoroughly complete the due diligence process, it is very likely that person will be disappointed in his or her investment.

The due diligence process allows the purchaser to identify the risks with...

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Contracts

Former Amazon Exec Sued For Going to Work for Google

When you sign a non-compete agreement in exchange for $325,000 as part of a severance agreement, you should avoid going to work for your prior employer’s rival (at least for awhile).

Former Amazon executive, Daniel Powers, signed a severance deal that he would not go work for the competition for at least 18 months. In exchange, Powers received $325,000. Rather than avoiding the “competition” and enjoying his severance pay, four months later Powers decided to accept a new job with Google, as the director of cloud platform sales.

While non-competes are not valid in California, the lawsuit that was filed by Amazon on Friday will likely stand as it was filed in Washington’s King County Superior Court. In a similar case, a...

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Business Startup

Key Term Sheet Provisions: Conditions Precedent to Financing

This week in our series on key term sheet provisions, we’re taking a look at conditions precedent to financing. In order to understand conditions precedent to financing, you have to remember that the term sheet itself is non-binding. The conditions precedent to financing detail events that have to occur before the term sheet will become binding.

What Are Typical Conditions Precedent to Financing? There is typically a clause that states the funding is conditioned on the investors completing due diligence, and being happy with what they find. This condition gives the investors the right to walk away from the deal even after the term sheet has been signed, if they find something out about the company that makes them no longer want...

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Contracts

Getting to Know Your Employment Agreement: Details on the Key Provisions of a Standard Employment Contract

Your company is ready to hire an employee. You searched the internet for free employment agreements. You finally found one you’d like to use. Here’s the problem: you don’t understand what every term of the employment agreement means and, more importantly, how those terms are going to affect your business moving forward. Luckily, we’ve boiled down some of the key features of a standard employment agreement for you in this article.

Most employment agreements will include provisions that detail the employee’s duties, term of employment, salary, employment start date, and any included benefits of the job. In addition to these employee-specific provisions, there are additional provisions that most employment agreements include, such as:

Confidentiality: this provision requires your new employee to agree...

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Business Startup

Creating a Social Media Policy?: An introduction to our series about the legal issues you should consider and how to avoid the legal hype.

At some point every business will need to decide whether to adopt a comprehensive social media strategy, including creating guidelines for employees to follow while using social media. While not every company will necessarily require such a strategy, the vast majority will benefit from adopting social media as a marketing tool. Accordingly, the vast majority of businesses will want to define how social media is used to promote their brand. And even those companies that decide not to adopt a comprehensive social media policy to promote their brand will still want to define how employees and others within the company must behave while using social media (even in their personal lives), in order to prevent costly social media gaffes.

The web...

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