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Recent Blog Posts
How Can a Company Defend Against Securities and Shareholder Litigation?
Businesses will need to take a variety of steps to protect themselves financially. However, the more complex a business is, the greater the chance that it will face issues related to investments, reporting, and other financial issues. Failure to follow the correct accounting or reporting practices may lead to business litigation. In cases where a company encounters disputes with shareholders or investors, owners and partners may need to determine how to defend against litigation and resolve disputes while minimizing their financial losses.
Securities Litigation and Shareholder Disputes
The Securities Act of 1933 is one of the key laws that affects companies in the United States. This law seeks to protect investors by ensuring that companies that offer stock for public sale meet certain requirements. A company must register with the Securities and Exchange Commission (SEC) and publish a prospectus that provides potential investors with financial information that can help them determine the benefits and drawbacks of investing in the company. This prospectus must include information about the types of business the company engages in and its executive management, as well as independently-certified financial statements.
Is Equity Financing a Good Option for My Business?
Whether you are the owner of an existing business or are looking to create a startup company, you will need to make sure your business has enough funds to operate successfully. There are multiple options for financing and capitalization, and they usually fall into one of two categories: debt financing and equity financing. If you do not want to burden your company with debt by taking out loans, equity financing may be the preferred option. There are multiple different types of equity financing that may be available. By understanding the best ways to secure investments, you can make sure you will have the funds you need both now and in the future.
Types of Equity Financing
With equity financing, you will typically receive money from investors in return for an ownership share in your company. The advantage of this type of financing is that you will not have debts that will need to be repaid. However, you will typically be required to share your profits with investors, and in some cases, investors may be involved in the decision-making process for your company.
UPDATE: How Can Florida’s Homestead Exemption Benefit Me?
Originally published: July 20, 2020 -- Updated: March 18, 2022
Update: Florida homeowners will want to understand exactly how the homestead exemption may be used in cases involving bankruptcy or foreclosure. The Florida State Constitution states that a property that is considered a homestead will be exempt from “forced sale” based on debts that are unrelated to the property itself. That is, a creditor who is seeking repayment for another loan, such as the balance on a credit card, may not place a lien on a debtor’s home. However, a mortgage lender will have the right to pursue foreclosure if a homeowner defaults on their loan. Unpaid property taxes may result in tax liens, and a mechanic’s lien may be placed on a home if a contractor is not paid for work performed on the property.
What Remedies Are Available for a Breach of a Non-Compete Agreement?
Many businesses rely on non-compete agreements to protect their interests. These types of agreements are often included in employment contracts or severance agreements, although they may also be used in partnership agreements or other types of business contracts. The purpose of a non-compete agreement is to make sure a person who has inside information about a company will not use this information to engage in unfair competition, such as by starting their own company or working for a competitor. If a company finds that a person who was subject to a non-compete agreement violated its terms, it may need to determine whether to pursue business litigation. By understanding the remedies that may be ordered by a court to address the violation of a non-compete agreement, a business can seek the proper forms of relief during litigation.
Can a Business Use Litigation to Recover Losses From Embezzlement?
While going to court to resolve legal concerns is often the last resort, there are many cases where businesses may need to pursue litigation to recover financial losses. These include situations where a business’s partners or employees have committed embezzlement. This form of fraud can have a significant impact on a company’s bottom line, and business owners will need to understand their options for holding a person responsible for their wrongful actions.
What Is Embezzlement?
Embezzlement may include any situations where a person who is given the responsibility to hold or manage property owned by someone else wrongfully takes possession of the other person’s money or assets. Embezzlement can take a variety of forms in a business setting, and examples of this type of fraud include:
How Can Mediation or Arbitration Be Used to Resolve Business Disputes?
There are many situations where businesses may become involved in legal disputes. These disputes may involve claims that a business is owed money by another person or company, that another organization has used trade secrets or proprietary information to engage in unfair competition, that the business or another party has failed to follow the terms of a contract, or that a business has engaged in discrimination or other unfair treatment of employees. While disputes may be resolved through business litigation, the process of filing and answering a lawsuit and conducting a trial in court can be very lengthy and expensive. In some cases, it may be more beneficial for both parties to use other methods to resolve their disputes, including mediation or arbitration.
Mediation Vs. Arbitration
Resolving disputes outside of formal legal proceedings in court can often be a more effective solution. In addition to saving time and money, the solutions reached using alternative dispute resolution may encourage cooperation between the parties, allowing them both to move forward successfully and continue working together in some cases. The specific procedures followed during alternative dispute resolution will depend on how well the parties will be able to work together and the amount of assistance they will need to resolve the outstanding issues.
What Restrictions Can a Non-Disclosure Agreement Place on a Person?
There are a variety of situations where a business may use non-disclosure agreements to protect sensitive information. These agreements may be included in multiple types of contracts, and they may prevent the release of trade secrets or other information that could cause a company to experience financial losses. For companies that are looking to create non-disclosure agreements or address violations of restrictive covenants, it is important to understand the legal requirements these agreements will need to meet and the types of restrictions they can put in place.
Terms of Non-Disclosure Agreements
A non-disclosure agreement (also known as an NDA) will include a variety of provisions, and these may include:
- Identification of the parties - As with any contract, an NDA will need to specify the people or companies that will be bound by the agreement. A non-disclosure agreement will usually involve a disclosing party that provides confidential information and a receiving party who will have access to the information being protected. Many non-disclosure agreements are unilateral, meaning that one party will be seeking protections by placing restrictions on the other party. However, other types of agreements may be mutual, and the restrictions may apply to both parties.
What Are the Steps Followed During Business Litigation?
Businesses may become involved in multiple types of disputes with other parties, and in some cases, these disputes may need to be resolved through the legal system. By filing a civil lawsuit against an organization or individual, a business may seek to recover financial losses, or it may ask that the other party be required to cease certain activities or fulfill their legal obligations. For businesses that are planning to take legal action against someone else or need to respond to a lawsuit filed against them, it is important to understand the stages of the business litigation process.
Steps Followed in a Civil Lawsuit Involving a Business
A legal dispute that is handled in civil court will usually proceed as follows:
- Demand letter - Prior to initiating a lawsuit, a person or business will usually send a letter to the other party asking them to take certain actions. For example, a company may request that money owed by another party be paid according to the terms of a contractual agreement. This will give the other party the opportunity to resolve the issue before legal action is taken, and the parties may be able to negotiate an agreement at this stage.
Read Our Top Business, Bankruptcy, and Real Estate Blogs for 2021
At The Elliot Legal Group, P.A., we work to provide our clients with knowledge of how the laws affect them and the legal issues that they may need to address when dealing with matters such as business litigation, real estate transactions, and bankruptcy. The blogs we publish address these issues and offer helpful information, and we wanted to highlight the most-read blogs from the past year:
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What Is the Status of Florida Evictions and Foreclosures Due to COVID-19? - The COVID-19 pandemic has continued to play a significant role in people’s lives, and those who have experienced financial difficulties may need to determine their options if they are facing a foreclosure on their mortgage or an eviction due to an inability to pay rent.
What Terms Should Be Included in a Business Contract?
Businesses use contracts for a variety of purposes, and these agreements can ensure that both parties fully understand their rights and requirements while also detailing how matters will be handled if one party fails to follow the terms of the agreement. In a previous blog, we looked at the elements needed to make sure a contract is valid and enforceable. As a follow-up, we wanted to discuss the terms that may be included in a contract to protect the parties and ensure that they will meet their obligations.
Types of Clauses That May Be Used in Business Contracts
A contract will detail the rights and duties that apply to each party, and it will also specify relevant dates, such as when work will be completed or products will be delivered. It will also include information about payment, including the amount that will be paid and the methods and dates of payments. In addition to this information, the parties may include a number of other clauses that address issues such as:
