Business Startup

LLC Operating Agreement series: Management Structure

Over the next few months we’ll be discussing some of the common terms of an Limited Liability Company operating agreement in a series of posts. The operating agreement provides the framework for operating and managing the business. The operating agreement provides the rights and obligations of the members, including members’ management abilities and economic interests. Without an operating agreement, Washington LLCs are governed by the default provisions provided in RCW 25.15 . In this first post, we’ll discuss the management structures and choices available for an LLC.

Key Feature: Flexibility

In Washington, the LLC statutes are incredibly flexible. LLCs are easily adaptable to the changing needs or circumstances of the members and the business. There’s also flexibility when choosing the management structure of the company. The primary constraint...

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Business Startup

The Social Purpose Corporation: A New Corporate Form in Washington?

Update: Legislation creating social purpose corporations has passed both the Senate and the House, and is expected to be signed by the Governor this month.

The Washington State Senate and House are considering legislation that would create a new corporate form: the social purpose corporation. The Senate bill is SB 6230, and the House bill is HB 2239. The legislation was drafted and requested by the Corporate Act Revision Committee of the Washington State Bar Association.

Background Under current Washington law there is no ideal corporate form for businesses that want to consider both the bottom line and a social mission. You can create a business that focuses on profits, a corporation. Alternatively, you can create a business that focuses on a social mission,...

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Business Startup

News Roundup 2012 Week Two: Securities Regulations; Executive Compensation; SOPA Protests; Regional News; Koomey’s Law

Hedge Fund Managers Petition SEC to Remove Prohibition on General Solicitation Under current regulations, issuers of securities in private placements are restricted in how they can solicit potential investors. The Managed Funds Association has petitioned the SEC to eliminate the prohibition on general solicitation and advertising in Regulation D under the Securities Act of 1933 (“Securities Act”) for offerings or sales by private funds. In the petition the MFA points out that the regulations prohibiting general solicitation are vague, and argues that the uncertainty surrounding the vague rules is harmful to business. For an in-depth look at the petition check out Jim Hamilton’s blog.

Executive Compensation: Discovery Channel’s New CFO Gets Paid to Join and to Leave The Discovery Channel filed their 8-K...

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Business Startup

News Roundup 12/15 – 12/21: SOPA, Twitter’s Angel, Louis CK’s New Business Model, Washington Economics, ETC

SOPA Vote Postponed; PIPA Set at Top of Senate List; Cantwell Supports OPEN Alternative Mark up and voting of the SOPA (Stop Online Piracy Act) bill that would either save the entertainment industry or ruin the Internet, depending on who you believe,  has been delayed due to “the House Schedule”. Fred Wilson suggests that the cause of the delay is either complaints from high-tech executives persuaded the bill’s sponsors to reconsider, the grass-roots movement objecting to potential over reach by SOPA persuaded the bill’s sponsors to reconsider, or because Representatives were bored with talking about SOPA and wanted to go home for the holidays. The related Senate bill PIPA (Protect Intellectual Property Act) is at the top of Senator Harry Reid’s...

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Business Startup

News Roundup 12/1-12/7: Mergers, Trademarks, Venture Captial Rounds, Vesting, and Spin Offs

RIM Walks Away From BBX Brand Name After Trademark Dispute Blackberry producer Research In Motion, Inc. has agreed to change the name of its new operating system from BBX to BlackBerry 10 after Basis International, Ltd. won a court order seeking an injunction in a trademark infringement claim. In October RIM announced that it would call its newest operating system BBX, and days later Basis International filed suit to protect its registered trade mark “BBx”. In what has been an already dismal year, RIM’s stock dipped further today on the heels of this news that it would have to rename its upcoming operating system.

Expedia Shareholders Approve Spin Off of Trip Advisor Earlier today we discussed the advantages to spin offs, here’s an...

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Business Startup

Personal Liability for corporate transactions after dissolution

In a recent Court of Appeals decision*, the honorable judge Laurel Siddoway reiterated the Supreme Court’s stance on applying the theory of promoter liability to post-dissolution corporate acts. This means, for purposes of individual liability, any acts occurring on behalf of the corporation after dissolution, whether voluntary or involuntary, must be made solely for the purposes of winding up the corporate affairs and business. A corporation’s key personnel may be held personally liable if they carry on any business that is not necessary to wind up and liquidate its business.

In Equipto Division Aurora Equipment Co. v. Yarmouth, the Supreme Court determined that RCW 23B.02.040 of the Washington Business Corporation Act applies to both prior corporation acts and post-dissolution transactions that...

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Business Startup

NY Times Highlights Seattle’s Economy

This NY Times article focuses on Seattle’s economic growth. The 2010 Census data is being released, and while some are focused on the growth of Texas and Florida, this Article focuses on Seattle. In an effort to understand why Seattle is growing while most other cities are shrinking in population, the article traces Seattle’s economy from 1880 to today. Edward Glaeser, the author, hypothesizes that key to Seattle’s growth is having highly educated workers. He also suggests that Seattle helped itself when it allowed taller buildings to be built in the downtown area.

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