Business

What does at-will employment mean?

At-will employment is the default rule of employment in the United States. However, some states, even ones that adhere generally to at-will employment, have restrictions and limitations surrounding employment termination. This post summarizes at-will employment in a general sense and does not delve into all exceptions and restrictions. As always, it is best to seek …

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Equity Investment Term Sheets: Liquidation Preferences

A liquidation preference deals with what happens to the proceeds of the Company after it is dissolved or sold. Investors typically want to get their money back first before anyone else and a liquidation preference outlines that right. There are several types of liquidation preferences. Standard Seniority This is present in most financings. It means …

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Best Practices in Creating and Enacting Return-To-Work Policies for the Company, Part 2

As more offices open up, more companies are seeking to keep their workforce safe. A vaccination policy, discussed in our previous blog post about return-to-work policies, is one piece of that process. However, no matter what policies a company has decided to adopt, there are important considerations in how to handle employee or visitor information …

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Equity Investment Term Sheets: Right of First Refusal and Co-Sale Right

Two common equity investment term sheet phrases are “right of first refusal” and “co-sale right” – but what do they mean? Right of First Refusal The right of first refusal is a right given to investors that allows them to purchase shares of stock that a stockholder is attempting to transfer.  For example, a co-founder …

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Best Practices in Creating and Enacting Return-To-Work Policies for the Company

COVID-19 has resulted in a multitude of questions about employment law and how businesses can navigate the pandemic in a safe and legal way.  In general, this overview on best practices will be high-level but these issues tend to be very state-specific, so a good starting point is going to be any state or local …

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What is the R&D Tax Credit?

Many people are vaguely aware of something called a “research and development credit.” It may bring to mind pharmaceutical research, manufacturing processes, or other traditional processes that businesses have been improving and creating for generations.  What people don’t realize is that the benefit of the R&D Credit doesn’t end there. Video game developers, software companies, …

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What’s the difference between converting or merging a non-corporation to a corporation?

Sometimes owners of a company that is not a corporation may want to convert it into a corporation to prepare for future investment opportunities. However, some states do not provide for statutory conversions. In those cases, a merger is the proper method. What is a statutory conversion? Statutory conversion is the process through which one …

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Term Sheets 101: Drag-Along and Tag-Along Rights

In term sheets and negotiations, two phrases that are useful to be familiar with are “drag-along rights” and “tag-along rights.”  Drag-Along Rights Drag-along rights allow majority investors to sell the company without minority stockholders having to sign off on the sale. Minority holders will be paid for their shares but they are unable to block …

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