Don’t Take Sides When Counseling Start-Ups

June 6, 2006 | Articles, Tim Herman

By Tim Herman

Businesses, like marriage, are most often started by idealistic founders, absolutely certain they cannot fail and they have found the co-owner(s) with whom they will share a conflict-free, prosperous and lifelong enterprise. However, the divorce rate among founders in closely-held corporations far exceeds the alarming marital failure rate. For both business owners and lawyers, the courtship and marriage phase of business formation and the separation and divorce phase of business dissolution are fraught with risks and unanticipated consequences, which are now in a state of judicial and legislative evolution. This article will focus on company formation. Please note that for purposes of this article, the term ‘close’ will be used at times to refer to any closely-held entity, as distinguished from a corporation that has elected close corporation status under article 12 of the Texas Business Corporations Act. (more…)

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Ten ways to stay out of court

May 23, 2004 | Articles, Sean Breen

Austin Business Journal – by Sean Breen

There is nothing more gratifying for an entrepreneur than to grow a great idea into a solid business.

However, a mistake I see happen again and again is pouring all one’s energy, time and funding into the conception and follow-through of the idea, while overlooking the business’ proper legal setup and administrative organization.

Ignorance is bliss, until that lawsuit you never thought would happen arrives.

Consider this. Would you ever leave your place of business at the end of the day and not lock the doors? Protecting your business should be about much more than having a good security alarm.

It’s about ensuring that the business is prepared to handle restrictive covenants, noncompete agreements, trademark infringement claims and employment issues. Keep in mind that no industry is immune to litigation problems.

Beyond the standard legal documents a corporate lawyer would prepare for any startup, here are some constructive measures to keep your business protected: (more…)

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