Keeping Up Yearly Corporate Filings

California law requires corporations, limited liability companies and common interest development associations to update the records of the California Secretary of State on an annual or biennial basis by filing a statement of information.  Keeping up with these yearly corporate filings is necessary in order to maintain good corporate standing and avoid penalties and fees.

If you do not file an annual statement of information and pay the accompanying nominal fee, the Secretary of State…

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Complications of Buying and Selling Property with Easements

Whether you are buying or selling real estate, it is important to determine whether any easements encumber the property, and, if there are, what effect the easements will have on the deal.

First, an easement is generally defined as a right to cross or use someone else’s land for a specified purpose. For example, your neighbor may have a small easement over your land to access the closest main road. The easement does not allow…

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What is a Close Corporation in California

In California, Close Corporations are creatures of statute. They are not judicially created as they can be in other states. Therefore, in order to benefit from the legal protections of a Close Corporation, it must be properly formed and meet all statutory requirements.

A Close Corporation is designed to give its shareholders more control over the operations of the business and allow for a flexible management model. A California Close Corporation may not have more…

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What is a Clawback Suit?

Ponzi schemes endanger investors and securities professionals, but these victims are not without recourse. Investors who fell victim to such schemes may pursue compensation from the brokers and other entities that perpetrated the fraud. They may also bring a clawback suit.  A Clawback suit allows them to seek compensation from the early investors who either knowingly or unknowingly benefited from their early involvement.

A common type of clawback suit is brought through federal equity receivers or…

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Managing Risk Through Corporate Compliance

A recent survey by AlixPartners found that corporations are directing their attention to finding ways to proactively manage potential risks. In the face of rising litigation and regulatory enforcement actions, corporate compliance and legal departments throughout the country reported that their efforts are going towards implementing education and training programs to reduce litigation risk.

AlixPartners’ 2014 Litigation and Corporate Compliance Survey polled general counsel and compliance officers from more than twenty major industries including insurance, financial…

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Time is of the Essence and Contract Performance

Contract performance is on one of the main sources of contract disputes, i.e., situations where there is late performance of the agreed upon terms, no performance, or performance that does not adequately match the contract terms. Generally, one party’s minor delay that does not significantly impact the overall contract or cause a material breach will constitute “substantial performance” and will not relieve the other party from performance. It is important to note, however, that…

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Limiting Liability and Damages in a Contract

Certain contract terms can limit liability exposure from potential lawsuits and other claims that may arise. These terms are generally found in limited liability clauses. Certain contractual terms can also limit damages, such as a liquidated damages clause. For these terms to protect contracting parties from liability, they have to be properly drafted and in line with California law.

Limited Liability

Limited liability clauses are permitted by California law, but courts will strictly construe such contract…

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California Boundary Disputes and Property Line Disputes

Boundaries are the lines defining the location of a parcel of real property. Boundary disputes frequently arise between homeowners, business owners, private individuals, and the government. These disputes sometimes arise because of misunderstandings, but more often they are just disagreements about ownership, land use, and property lines.

Other property disputes involve disagreements about the boundaries. These disputes can arise from changes in property ownership, conflicting property descriptions, or even changes in the physical property.

Just as…

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What is a Receivership?

A receivership is used to help enforce court judgments. A court can appoint an unbiased third party to be a receiver, and this person or entity is then charged with carrying out a court’s orders. Establishing a receivership is only one of many options to enforce a judgment, but they are particularly useful in cases involving management of a corporation, small business, or income-producing real property.

The purpose of a receivership is to enforce an order…

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Why You Should Never Destroy Evidence

If you find yourself or your business in the middle of a lawsuit, the absolute last thing you should do is destroy evidence, such as documents and files, whether or not they are damaging or incriminating.  If you have been sued and you get rid of or destroy evidence, including emails, you may face severe penalties, including criminal ones.  An example of the many rules and laws that prohibit tampering with or destroying evidence is…

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