Christopher M. Adishian Business Law Blog

[Originally published May 9, 2011 at California Corporate Lawyer]

Selling a minority interest in a privately held business in California
must be handled thoughtfully. First, if you are able to sell a minoroty
interest in a privately held business for a profit (whether small or
substantial) you are already on a good path. This article address some
consideration for an individual minority owner who is also an employee.

The
good news is that you are... Read More

[Originally published May 9, 2011 at California Corporate Lawyer]

Selling a minority interest in a privately held business in California
must be handled thoughtfully. First, if you are able to sell a minority
interest in a privately held business for a profit (whether small or
substantial) you are already on a good path. This article address some
consideration for an individual minority owner only (e.g. not an
owner-employee).

The... Read More

[Originally published May 9, 2011 at California Corporate Lawyer]

The concept of ownership is deeply woven into the American Dream --
e.g. own a home, own public stock, own bonds, own a business -- so
deeply woven in fact that sometimes "ownership" becomes the goal
regardless of the consequences attendant to that "ownership." Yes, when
done properly, with due attention to the risks, rewards and ROI (return
on investment),... Read More

[Originally published January 12, 2009 at California Corporate Lawyer]

California Corporation Code § 1800 provides several grounds for
involuntary dissolution. A court may grant involuntary dissolution
where (1) “[t]hose in control of the corporation have been guilty of or
have knowingly countenanced persistent and pervasive fraud,
mismanagement or abuse of authority or persistent unfairness toward any
shareholders or its property... Read More

[Originally published 2007 and republished, January 12, 2009 at California Corporate Lawyer]

Majority shareholders may be held liable for damages for breach of a fiduciary obligation to minority shareholders, Jones v. H. F. Ahmanson & Co., 1 Cal.3d 93, 81 Cal.Rptr. 592, 460 P.2d 464; Brown v. Halbert, 271 A.C.A. 307, 316, 76 Cal.Rptr. 781; and 3 Witkin, Summary of Calif. Law (1960) Corporations,
s 99, p. 2390 (1967 Supp. p. 998). A majority... Read More

[Originally published January 12, 2009 at California Corporate Lawyer]

What is an Exchange Fund?

An exchange fund allows
company founders and other large shareholders to contribute a portion of
their own company stock in exchange for an ownership percentage (i.e.
limited partnership interest) in a new entity that holds a diversified
portfolio of private company shares. As the portfolio companies realize
liquidity events... Read More

[Originally published July 3, 2007 at California Corporate Lawyer]Many venture backed (and other corporations) choose to incorporate
in Delaware due to its well-developed law regarding various common
corporate issues. One such issue is a shareholder's right to inspection.

8 Del. C. Sec. 220The controlling statute governing shareholder inspection rights is 8 Del. C. Sec. 220, which provides that : "(b)
Any stockholder, in person or... Read More

[Originally published 2005, republished March 6, 2007 at California Corporate Lawyer]

Are you considering filing a complaint against a California Corporation
for money owed to you or your clients? Who can be held liable? Can only
the corporate entity be named as a defendant? Can individual
shareholders, directors or officers also be named as defendants? Can the
alter-ego doctrine be applied to non-profit corporations?

Generally,
... Read More

[Originally published 2004, republished March 6, 2007]

Exemptions From Federal and State Securities Laws:Are
you a small business owner in California looking for a legal way to
raise capital without being a licensed broker-dealer? What federal and
state securities laws matter? Do you have to file any documents with the
federal or state government? Does your company qualify for an
exemption?

Federal Laws:In... Read More

[Originally published 2004, republished March 6, 2007 at California Corporate Lawyer]

Are you thinking about investing as a minority shareholder in a
company? Perhaps you are thinking about taking on outside investors for
your current company? What are your rights as an investor? What should
you be concerned about as a majority shareholder?

The Minority Shareholder
Understandably,
minority shareholders often... Read More