California provides various exclusions from reassessment of property tax when a “change of ownership” occurs.  One of the most common exclusions is used to prevent reassessment for transfers from a parent to a child or from a grandparent to a grandchild (often referred to as the "parent-child exclusion").  However, it is important to understand when a “change in ownership” occurs and how long you have to apply for an exclusion from property tax reassessment. “Change...

As we discussed in our blog last week, a foreign corporation or other business entity transacting business within California must comply with the certification requirements of Corporations Code § 2105 and obtain a Certificate of Qualification.  As set forth in the following list, the consequences for failing to comply with the California Corporations Code (the “Code”) can be harsh. A foreign entity is not permitted to maintain an action or proceeding within California regarding...

We have previously written about doing business in California, and how the California Corporations Code uses a “transacting intrastate business” test.  Importantly, if a corporation or other entity is deemed to be doing business in California under the “transacting intrastate business” test, that entity must obtain a “Certificate of Qualification” under Corporations Code § 2105.  This post will look at what will and will not constitute “transacting intrastate business.” Transacting Intrastate Business Transacting intrastate business means that...

Section 16600 of the California Business and Professions Code prohibits contracts from restraining individuals “from engaging in a lawful profession, trade, or business of any kind.”  While the reach of Section 16600 is broad (recently reaching as far as the  Delaware Court of Chancery), it has traditionally been applied only to employment contracts or agreements that contain non-competition or non-compete clauses where the former employee is prevented from working with a competitor. But what about...

Previously on the blog we discussed how non-compete agreements in California are presumed void unless they meet one of two very narrow statutory exceptions. A recent decision from the  Delaware Court of Chancery further emphasized the reach and effect of this presumption by upholding a California employee’s right to contract despite a non-compete agreement in an employment contract governed by Delaware law. Specifically, in  Ascension Insurance Holdings, LLC v. Underwood et al., the Delaware Court...

“No prudent individual would make a contract for the construction of a building of any magnitude without incorporating a provision somewhere making specific and definite arrangements concerning extra work.” City Street Improvement Company v. Kroh, 158 Cal. 308, 321 (1910). Previously on our blog, we discussed how changes to construction contracts are often unavoidable, but that there are limitations to how much a construction contract can change. In this article, we will discuss the proper tool...

A “B” Corporation is an unofficial designation for socially responsible businesses.  It can also be referred to as a B Corp, Benefit Corp, or B Corp Certification. The 501(c)3 nonprofit, B Lab, determines and designates B Corporations. There are over 1,000 Certified B Corps in more than 60 industries.  Companies that have obtained B Corp designation include Etsy, Method, Seventh Generation, Ben & Jerry’s, and Patagonia. There are many benefits associated with B Corporation status. Designation as...

Varying circumstances may require parties to a contract to modify their original agreement.  For example, contract modification may be necessary if parties want to extend a contract, change its duration, alter the quantity of goods to be sold or delivered, change a delivery time or place, or change a payment amount or type. Parties typically can modify a contract at any time, as long as all the parties agree to the changes.  Minor changes in a...

Intellectual Property Basics It is important to protect the intellectual property and proprietary aspects of any businesses’ goods and/or services.  There are a variety of different ways to go about protecting your intellectual property, and it is important to determine what method will accomplish your goals effectively. It is therefore important to develop an understanding of the different intellectual property protection options. Depending on your company’s needs, you may want to consider either a patent,...

What is the difference between a merger and an acquisition?  The terms “merger” and “acquisition” are common business terms, but they are often inappropriately used interchangeably, when in fact the two transactions are rather different. If you are planning to combine or purchase assets from another company it is imperative that  you understand the benefits and drawbacks of each. Merger In a merger, usually two or more businesses wind down as separate entities, and then a...