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...

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...

Specific performance is a type of remedy available in some contract disputes where a plaintiff requests that a court enforce the contract in question and force the defendant to perform the agreed upon terms instead of or in addition to paying the plaintiff money damages. It is most commonly used when there is a dispute over the purchase and sale of real estate. Specific performance is an important remedy because real estate projects often involve...

Under the doctrine of respondeat superior a principle (employer) is liable for the torts of its agents (employees).  A principle-agent relationship exists where the employee has agreed to work on behalf of the employer and to be subject to the employer’s control or right to control the physical conduct of the employee. Respondeat superior is Latin for “let the master answer.”  In the employment context, it might be read more accurately as meaning that “the...

There are many reasons to invest in a business, such as joining a new startup, or becoming part of an established and successful business poised for more growth.  Sometimes these new or established companies just need a little additional working capital to be successful.  Before committing, however, it is important to approach the opportunity with objectivity, weigh all investment considerations, and understand the risks and goals associated with the potential investment. First, assess whether your...

Previously on our blog, we discussed the California statute that protects consumers and business competitors from unfair business practices. In today’s entry, we will further parse out what exactly constitutes an “unfair business practice.” As mentioned before, section 17200 of the California Business and Professions Code states that “unfair competition” includes any unlawful, unfair or fraudulent business act or practice. The key to knowing whether you have a case under the statute is understanding what type of activity...

California law protects both consumers and business from unfair and illegal business practices.  Unfair and illegal business practices are major concerns of business competitors, especially with increased competition, and cost reduction measures. California Law Preventing Unfair Business Practices Section 17200 of the California Business and Professions Code states that “unfair competition” includes any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any other act prohibited by the Business and Professions Code. This is...

Countless business people go into a business partnership, whether in the form of a true partnership, a joint venture, limited liability company, or corporation with the best intentions, only to find themselves in a legal dispute. Clashes amongst partners, members, joint venturers, and/or shareholders are extremely common, and occur in every type of business and industry. As in divorce, financial issues predominate over other causes of insider disputes and dissatisfaction.  Also like divorce, business partners...

Although it is not required to have a formal written agreement to form a general partnership, having one is highly recommended, not only because it can be very difficult to prove the existence of and enforce informal oral arrangements, but also because the “default” statutory laws a court will apply in the absence of an agreement may not ensure an equitable result. Before creating any partnership, the parties should work with an attorney to create...

The two most common types of partnerships are general partnerships and limited partnerships. Depending on the type of business involved, one type of partnership may be a better option than the other. General Partnerships All it takes to form a general partnership is an agreement between two or more people to enter into business for profit.  There does not need to be a written agreement, and no state or local filings are required. This formation requirement...