The Securities and Exchange Commission requires that companies disclose important financial information through the registration of securities. However, there are exemptions to this requirement that allow some types of offerings without the need of registration. In order to allow investors to make informed judgments about buying or selling securities, the SEC requires that important financial…
Insider trading occurs anytime that an employee of a company buys or sells stock in the company that they are currently employed by. This is a crime if the employee, whether selling or buying stock, is using knowledge that is not available to the public. While insider trading seems to only exist in high-level trading,…
Blue sky laws are the security laws of each state, differing from the Securities and Exchange Committee’s laws and rules that are national. These laws are designed to protect investors against false sales practices and activities. While it is often thought that all security laws come from the Securities and Exchange Committee, the blue sky…
Private placement is essentially investing money into a privately owned company. Investors may receive common shares, preferred shares, other forms of ownership interests, warrants, promissory notes (including convertible promissory notes), and bonds. Private placement is a non-public offering of securities that, if qualified, do not need to be registered with the SEC. There are many…
A holding company is an entity that does not actually carry out any business. It is created and then it creates and owns a business in order to limit liability. Although a holding company does not do any of the actual business, it maintains the wealth of the company that it owns, while having limited…
Every employee is entitled to certain rights in the workplace. The employee rights are designed to protect them in the workplace from discrimination, dangerous surroundings, harassment, invasion of privacy and unfair treatment. If you feel your rights are being violated it is important to contact an attorney immediately to discuss your options. Employee rights include…
A limited liability limited partnership is a limited partnership that has at least one general partner and one limited partner. Often times the general partners are the ones in control of the LLLP while the limited partners have primarily a financial interest. A limited liability limited partnership is a newly emerging type of business that…
A limited liability partnership is very similar to a limited liability company, however, it has significant differences. An LLP in some states does not have the same level of protection for the owner’s personal assets if the business goes into debt. Also, the business does not have the same protection from the owner’s personal debt….
A Statutory Close Corporation is created under a supplemental state corporation statute, and is controlled by special state law. This type of corporation is similar to a limited liability company but is it able to function without some of the formalities that are included in an LLC such as a board of directors. A Statutory…
A limited partnership is similar to a general partnership in that a corporation or limited liability company has not been created and there are multiple owners. However, in the case of a limited partnership, there are more than general partners; there are limited partners as well. When deciding what type of business to form, a…
When a person buys an annuity the money they used becomes an exempt asset. However, when you receive the money from the annuity, its exempt status is often lost. However, the money in the annuity is protected and remains a source of income.
According to federal bankruptcy laws, a debtor’s retirement plan is exempt from creditors. Small businesses have essentially the same ability to create retirement plans as large corporations and therefore should take advantage of them as an exemption. When a retirement plan qualifies under the federal Employee Retirement Income Security Act, it is exempt from bankruptcy…
One of the most popular and widely used exemptions is the Homestead exemption. In this case, it is possible to make your home out of reach for creditors. However, many states put a limit on the amount of your home that is exempt over a certain value. Protecting your home is crucial when dealing with…
Using the Federal Trade Commission’s Credit Practices Rule some liens against household property can be invalidated. The household property that fall into the category for invalidation are those that are considered goods or necessities. In order to use the FTC Credit Practices Rule to invalidate a lien the lien must be a consumer good, not…
Lien stripping can be a very useful tool for small business owners who are filing bankruptcy and want to protect an asset that falls under exemption but is not completely exempt. Lien stripping can be a very useful tool to small business owners. According to the bankruptcy code, a lien is secured only to amount…
On May 16, 2014, Governor Dayton approved a statute that voids indemnity agreements in design professional service contracts when the contract requires the design professional to indemnify the actions of others who are not the design professional servicer, their employees, or others for whom they are liable. This bill has been in the works for…
In Minnesota, you now have the option of creating a Public Benefit Corporation for your social enterprise. This lets you combine the benefits of a business with a charitable purpose like a nonprofit organization. Minnesota state law allows a business engaged in social enterprise to avoid becoming an LLC or traditional corporation by electing to…
Governor Dayton signed the Responsible Contractor bill into law. Although the notion of a “responsible contractor” has been around for a long time it has never been clearly defined. In this new law, which is set to take effect on January 1, 2015, the term has been given certain meaning. This new statute only applies…
Strategy: The Antidote to Competition Wouldn’t it be great to just take a pill and make your competition go away? Of course it will never be that simple. I believe we can agree that all the easy problems have been solved and if we are ever to be able to make our competition irrelevant it…
As I was reading about athletes and the long term effects of multiple concussions, I made a startling connection. These people willingly subject themselves to brain damage in the pursuit of their career. I have witnessed the same phenomenon during PowerPoint presentations. It’s hard to imagine a more ubiquitous form of corporate torture. (If Al…
Discomfort is a Signal The more I work with business owners and CEOs, the more I am confronted with a surprising human foible: no matter how successful and confident people may be we will go to tremendous extremes to avoid dealing with the bad actors in our lives. Of course there are those rare individuals…
Unfortunately, sometimes an aggrieved shareholder of a corporation has to sue to either prevent or remedy a wrong either on behalf the corporation or to protect that shareholder’s ownership of shares. Depending on the shareholder’s injury, a shareholder must decide if he or she is to bring a derivative lawsuit or a direct lawsuit. What…
How do you start a small business in Minnesota? Minnesota entrepreneurs often seek advice regarding the creation and growth of a small business. The entrepreneurial process generally involves (1) having a business idea, (2) creating a plan, and (3) implementing the plan. The planning process may involve a number of areas: 1. Small Business Idea…
This section answers these questions: What do I need to do to form a business? What is the difference between the various Minnesota business types I can form? Minnesota small businesses can select from a number of business entity types when forming the business. Common formation entity types include the Sole Proprietorship, Partnership, LLC, S-Corp,…
Problem: You need to prove to a bank (or another) that you own your business Imagine you walk into a bank to open a new checking account for your business. The banker says you must provide proof that you own the business. You hand the banker the articles, bylaws, member control agreement, or other documents…
Every small business needs a business attorney who can be a resource as legal issues arise. Small businesses use a business attorney in many ways:
A small business plan is a written guide to starting and running your business. Having a business plan is essential. A business plan will help you obtain loans and provide a map for you to follow. This article explains what to include in a business plan and how to prepare one.
Before seeking financial assistance for your Minnesota small business, here are some questions to ask yourself: Do you need more capital or can you manage existing cash flow more effectively? How do you define your need? Do you need money to expand or as a cushion against risk? How urgent is your need? You can…
Buying a Business Many find the idea of running a small business appealing, but lose their motivation after dealing with business plans, investors, and legal issues associated with new startups. For those disheartened by such risky undertakings, buying an existing business is often a simpler and safer alternative. Here is a quick overview of the…
You have probably heard the statistics: three out of every four new businesses fail within one year. Why is that? The expectations and motivations that people go into business may be part of the problem. Have you heard any of these phrases? Be your own boss. Get off the treadmill and work for yourself. Stop…
