The High-touch Legal Services® Blog…for Startups!

© 2009-2016 Dana H. Shultz, Attorney at Law

How Can I Calculate My Share Ownership Percentage?

2% graphic illustrating share ownership percentageI am writing this post about calculating one’s share ownership percentage because of an email exchange I had on behalf of a client.

We had formed a Delaware corporation with 10 million authorized shares. Of the authorized shares, 8 million had been issued to the founder.

The founder and an independent contractor had agreed on equity compensation for the contractor. The agreed-upon share ownership percentage was 2%.

The contractor thought that he should receive 200,000 shares (2% of 10 million). The rest of this post explains how and why the contractor was incorrect. (more…)

DMCA Designated Agent List Going Online

Logo of US Copyright Office, which announced that its DMCA designated agent paper filings will transition to an online systemThe U.S. Copyright Office maintains designated agent records under the Digital Millennium Copyright Act (DMCA). The Office recently announced that will be moving from paper to an online system.

DMCA Background

The DMCA protects online service providers against liability for user-provided content that infringes third parties’ copyrights. (Please see Terms of Use and the Digital Millennium Copyright Act (DMCA) .) However, there are several requirements for that protection to exist. (more…)

Corporate Officers Need Not Be Human Beings

Logo for Quora, where Dana Shultz answered a question, stating that corporate officers need not be human beingsThis post discusses my surprise at finding that there apparently is no requirement that corporate officers be human beings.

My answer to a Quora question is the basis for this post. Please see Could an A.I. create a company and do all the functions typical of another company?

I was about to write an answer stating that corporate officers be natural persons (human beings). But with a bit of research, I found that apparently is not the case! (more…)

What are Novelty and Non-obviousness?

Logo for Quora, where Dana Shultz answered a question about novelty and non-obviousness for utility patentsNovelty and non-obviousness are requirements for a utility patent to be granted in the United States.

This post explains the meaning of novelty and non-obviousness. I have based this on my answer to a Quora question. Please see What exactly defines novelty and non-obvious in regards to patenting?

USPTO on Novelty and Non-obviousness

I have copied, below (emphasis added), portions of what the U.S. Patent and Trademark Office says about these criteria. For more information, please see General information concerning patents. (more…)

How Can I Avoid Misappropriating Trade Secrets?

Logo for Quora, where Dana Shultz answered a question about how one can avoid misappropriating a former employer's trade secretsThis post discusses how one can avoid misappropriating a former employer’s trade secrets. I first wrote about this topic on Quora. Please see How does one make sure one doesn’t misappropriate software trade secrets?

Definition of Trade Secret

Unfortunately, there is no single definition of “trade secret”. Definitions vary somewhat from state to state, and the U.S. government recently created its own definition. (Please see Trade Secrets Receive Federal Protection.) (more…)

What is a Certificate of Determination?

Logo for Avvo, where Dana Shultz answered a question about: a Certificate of DeterminationOne of my Avvo answers led me to write this post. Please see CA corp Certificate of Determination: must it include tag-along and drag-along provisions?

Corporations, by default, issue common shares to shareholders. However, corporations also can issue preferred shares. Preferred shares have characteristics (“preferences“) that typically make those shares more desirable than common shares. Please see What is Preferred Stock?

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Document Discriminator Appears on Driver’s Licenses

Logo for Quora, where Dana Shultz answered a question about the Document Discriminator that has been appearing on various states' driver's licensesThis post about the so-called Document Discriminator on driver’s licenses is somewhat off-topic for this blog. However, I find this tidbit of information so interesting that I feel compelled to write about it.

I first presented this information in a Quora answer that I wrote last month. Please see What does the DD on a Michigan driver’s license mean?

DD = Document Discriminator

DD is an abbreviation for Document Discriminator. A number of states started adding this piece of information to their driver’s licenses several years ago. (more…)

When is a Shareholder Vote Required?

Logo for Avvo, where Dana Shultz answered a question about: when a shareholder vote is requiredThis post discusses when a California corporation must hold a shareholder vote.

It is based on an Avvo answer that I wrote recently. Please see Beside elections, are there corporate decisions that REQUIRE the vote of the shareholders?

California Shareholder Vote Requirements

A corporation must hold a shareholder vote to approve the following actions. Please note that this may not be a comprehensive list. Reference links are to the relevant California Corporations Code sections. (more…)

Employment Law for Foreigners

Logo for Quora, where Dana Shultz answered a question about U.S. employment law for foreignersThis post is about employment law. It is directed particularly to people from other countries who are not familiar with U.S. employment practices.

It is based on my answer to a Quora question.  Please see What are the most important aspects of American labor law that a foreigner trying to make a terrestrial logistics company in (any state of) the U.S. should take into consideration?

I am providing this answer based on my experience helping dozens of international clients conduct businesses in the U.S.

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$800 Franchise Tax is Due Even if LLC is Canceled

Logo for Quora, where Dana Shulltz answered a question about California's $800 franchise taxThis post about California’s $800 franchise tax is based on my recent answer to a Quora question.

Q.: In California, can someone shut down an LLC before the $800 franchise tax is due on the 15th day of the 4th month?

A.: One can cancel a California limited liability company before the 15th day of the fourth month. However, such cancellation will not eliminate the obligation to pay the $800 annual franchise tax. (more…)