Too often, entrepreneurs (who intend on starting the next IPO) pay little to no attention to their organizational documents. This is quite intriguing, as it is similar to buying a house, and not paying attention to whose name is on the title, or what is in the covenants, conditions, and restrictions or neighborhood association bylaws; or getting married and not discussing prior to such marriage who will pay the mortgage.
When a couple that is in love decides to get married, no one wants to think about how it might end in divorce but to protect their assets, sometimes a pre-nuptial agreement is necessary. No one should avoid making major business moves while they are in the honeymoon phase because the future is ultimately unpredictable—this is just as true for business partnerships as it is for traditional marriages.…
When a for-profit corporation transacts with its non-profit affiliates, maintaining compliance can quickly become far more complicated. This can be especially true when company directors or officers have overlapping duties between for-profit and non-profit entities. However, for many it is still advantageous to create a non-profit subsidiary due to the benefits of attaining tax-exempt status, federal grant eligibility, reduced liability, expanded lobbying opportunities, and greater independence from the parenting organization. …
Continue Reading Non-Profit Subsidiary and Affiliated Entity Essentials
The growing popularity of art generated by Artificial Intelligence (AI) is no longer just a question of whether it is morally right to replace human artists. Now the discussion has expanded to consider the possible legal ramifications of art that is produced with an algorithm based on the data of other existing art styles. How can this be considered an original artwork and who is the author? These are all questions that complicate copyright laws which require that a work be original in order to be protected intellectual property. …
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As a litigator, I regularly encounter clients who have invested in a limited partnership and are outraged at the actions of the general partner and its principals. Most of the time, they believe the general partner has mismanaged the partnership. Not infrequently, they contend that the general partner represented that the partnership would invest in one category of asset when in fact, it invested in something else. Unfortunately, these clients often face an uphill battle should they wish to sue to recover their investments. These situations underscore a key point of investment diligence: read your partnership agreement carefully and assume it means what it says, particularly if it is governed by Delaware law.
Continue Reading Investment Diligence: Why Your Delaware Partnership Agreement Means What It Says
It is essential for companies to maintain compliance with the latest government regulations regarding corporate governance to protect their investments and reputation. The Securities and Exchange Commission—or the SEC—has adopted a series of amendments to Section 14(i) on August 25, 2022, designed to uphold a balance between the interests of company stakeholders, shareholders, executives, their customers, and the government. These amendments now require registrants to clearly disclose the relationship between the executive compensation that is actually being paid out and the financial performance of the registrant over the course of the applicable time period for disclosure.
Continue Reading SEC Adopts Pay Versus Performance Disclosure Rules
The fair market value (FMV) is the current value of one share of a corporation’s common stock on the open market. Common stock simply refers to the security that represents ownership in a corporation which grants owners a claim to that company’s ongoing and future profits, which can also be bought or sold by stock traders.
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What Types of Companies Must Register with Texas?
Any company that was not formed in Texas is considered a foreign entity that must file an application for registration with the Texas Secretary of State (SOS) in order to do business in the state. The Texas Secretary of State requires any out-of-state non-U.S. entities and financial institutions to register with Texas in order to transact business in the state.
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Earlier this month, the IRS released much-awaited guidance on what areas will qualify as an “energy community” for purposes of the energy production and investment tax credits in Notice 2023-29.
Under Code sections 45, 45Y, 48, and 45E, qualifying energy projects located within an energy community are eligible for a significant bonus tax credit—10% or 2 percentage points, as applicable to the specific credit.…
Winstead PC, a leading national law firm, has renewed its partnership with MassChallenge, the global network for innovators, to help accelerate high-growth businesses and startups in Texas. For the third year, Winstead will continue to serve as the legal advisor to startups participating in MassChallenge’s Texas-based programs in Austin and Houston. The law firm is committed to supporting founders’ and entrepreneurs’ ability to thrive and scale their businesses.…
Continue Reading Winstead Renews Partnership with MassChallenge