Corporate Legal Questions

It depends on several issues.  You should read the non-compete agreement, and look for an assignment and/or survivability clause.  Additionally, you should read any contracts that you signed that may incorporate the non-compete agreement as part of the contract.  Lastly, you should contact a local employment law attorney to determine the survivability of the non-compete agreement, and how you should proceed.  This is not intended to be legal advice, and is general in its nature. No attorney-client relationship exists or is formed by this information. Furthermore, this does not represent the views or opinions of LexisNexis or its affiliated companies.... Read More

Setting up a corporate structure that would work in this situation depends substantially on the reason your new employee wants the 10%. If it is for income purposes, setting up a preferred stock with dividends but non-votiing rights might work, but if it is for control reasons, you would probably not be able to give him 10% and not reduce the principals percentages.Thus it is important to get answers to more questions before a structure can be devised. This is not intended to be legal advice, and is general in  its nature. No attorner client relationship exeists or is formed by this information.Furthermore, this does not represent the views of Lexis Nexis or its affiliated company.... Read More

No, you cannot convert a not-for-profit into a for-profit corporation. The articles of incorporation are totally different. Your LLC could be converted into a corporation without much difficulty. If you have "colleagues" in your LLC (presumably "Members") you should authorized the conversion in corporate minutes in conformity with your Operating Agreement. LegalZoom and other online sites permit non-attorneys to form companies, but 90 percent of them are formed incorrectly since they do not properly issue their equity (membership interests in LLCs, shares in Corporations), never have a proper First Meeting or adopt Bylaws (Corp.) or an Operation agreement (LLC) and never consider matters such as a buy-sell agreement in case one party want to sell his shares, dies, becomes disabled, etc. Having an outside attorney you can call before a problem arises is always a good idea.... Read More

You may communicate with plaintiff's counsel but you may not file a pleading with the court. Be wary, unless you have an extension of time to answer the complaint, after 30 days you may be surprised to find that a default has been taken against the corporation. That extension of time to answer should be in writing.... Read More

The best answer would be found in the Bylaws of the Corporation. As a director, you have the highest level of access to information and participation since the management of any corporation, for profit and not for profit is vested in the Board of Directors. As to public versus public comment, I know of no state statute on the policy.... Read More

Fair use is not applicable here.  The educational exception to copyrighted work does not allow the illegal downloading of software.  For instance, if a school or university were to do the same thing, they would be subject to civil suit for violation of numerous copyrights and intellectual property laws because they did not purchase the software.  If they were to purchase the software and allowed their students to analyze the software or similar activity that may constitute the educational exception to copyright infringement.   This is not intended to be legal advice, and is general in its nature. No attorney-client relationship exists or is formed by this information. Furthermore, this does not represent the views or opinions of LexisNexis or its affiliated companies.... Read More

As with all non-profit organizations, your first priority should be to be sure that you do not stray from your mission and, in so doing, threaten your tax-exempt status.  Whatever criteria you use to select your new directors, be sure they are in keeping with your mission statement, are not political in nature, and otherwise in compliance with the IRS' rules on tax-exempt organizations. Regarding the actual process of appointing board members, you should refer to your organic documents, such as your articles of incorporation and your by-laws.  If those documents do not lay out a process, consult an attorney to verify that the process you have selected is in keeping with the law. You should also consider consulting an attorney to oversee this entire process to be sure that you do not risk your tax-exempt status.   DISCLAIMER: This is not intended to be specific legal advice and should not be relied upon as such.  No attorney-client relationship is formed by this posting.... Read More

One cannot copyright an idea.  Instead one can copyright the manifestation of that idea.  So for instance, no one can copyright, trademark or patent the idea of a soft drink; one can however protect the idea of "Coca Cola".  So in this case, you need to manifest the idea in a different way.  Can you improve on the idea?  Can you "tweak" it enough to change how the idea is viewed by the public?    In reference to the non-disclosure, you can always ask that the recipient of the idea refrain from using it.  But as noted above, if all you have is the idea, but no way to "deliver" the idea to the public, then the non-disclosure will be of little use.  On the other hand, if you have indeed created a product from the idea, then the non-disclosure will be a worthwhile pursuit. Michael J. Katz Corporon & Katz Aurora, Colorado... Read More

There is no reason not to create an entity in New York. From the limited information provided in your question, it is unclear why you want a single corporate umbrella. Moreover, a corporation is different than an LLC(limited liability company)- there are advantages or disadvantages, dependent on your needs, the tax consequences, the entity's operation, etc. You should consult with qualified counsel, in determining which path to take. Gerry Wendrovsky, Esq.www.upperwestsidelawyer.com    ... Read More

In order for your donors to receive a tax deduction, your theater company must receive tax-exempt status from the IRS.  The application for filing is Form 1023; the instructions will guide you as to what additional documents are required.  You must also file with the state as a nonprofit corporation; that is done through the state government. If you are able, I would suggest that you receive assistance from a local attorney with nonprofit experience.... Read More

Certainly you can be sued, but the question will be whether you will defeat the lawsuit. As a board member, various questions arise- what is your fiduciary duty, to the board or the association? What efforts did you make to reveal the truth? Is there insurance that will cover your representation available, and for what purpose? You should discuss these issues with a qualified attorney. Gerry Wendrovsky, Esq.- Upper West Side Lawyerwww.upperwestsidelawyer.com  ... Read More

Dear Sir or Madam:      The answer is probably yes.  If you are using the company's equipment and it during your business hours (or even after business hours if you are working late), the company has the right to access your messages.  The usual reason for this is that the company expects its employees to use the company time for company business and not for "amusement" as you noted.  Further, it is a way to monitor compliance with any written email/social network policies that it may have.  If you are concerned, you should contact your HR department and ask that they give you chapter and verse of such policies from the employee handbook.  If in fact there is no such policy, them you may possibly have a first amendment claim.  Even if there is no written policy however, it would be very difficult and expensive to pursue the matter.       The caution that I always give clients is that: (i) email/im are forever; and, (ii) don't use company equipment for personal matters.      Best of Luck   Michael J. Katz... Read More

Under Chapter 78 of the Nevada Revised Statutes, an officer is not liable for the debts or liabilities of a corporation solely based upon his or her officer position.   Under NRS 78.130, the secretary or other officer of a private corporation was held to only hold the authority delegated to him by the bylaws and board of directors of the corporation and is not solely by reason of that office personally liable for debts of the corporation. Berman v. Riverside Casino Corp., 247 F. Supp. 243 (D. Nev. 1964), aff'd 354 F.2d 43 (9th Cir. 1965).  More specifically NRS 78.747 provides:  NRS 78.747  Liability of stockholder, director or officer for debt or liability of corporation.             1.  Except as otherwise provided by specific statute, no stockholder, director or officer of a corporation is individually liable for a debt or liability of the corporation, unless the stockholder, director or officer acts as the alter ego of the corporation.             2.  A stockholder, director or officer acts as the alter ego of a corporation if:                   (a) The corporation is influenced and governed by the stockholder, director or officer;                   (b) There is such unity of interest and ownership that the corporation and the stockholder, director or officer are inseparable from each other; and                   (c) Adherence to the corporate fiction of a separate entity would sanction fraud or promote a manifest injustice.            3.  The question of whether a stockholder, director or officer acts as the alter ego of a corporation must be determined by the court as a matter of law. However being an officer of a corporation does not in and of itself absolve a person of for his or her individual acts and liabilities. For example, officers and directors have been held personally liable where they transferred assets to shareholders instead of creditors. See Nevada Land & Mortgage Co. v. Lamb, 90 Nev. 247, 524 P.2d 326 (1974)... Read More

In most instances, passive shareholders have no duty of loyalty or exclusivity to an entity in which they hold an equity stake.  Nonetheless some closely held companies have exclusivity or non-competition covenants as part of their bylaws or operating agreements.  You should verify regarding whether you have executed any covenants as part of your ownership interest.... Read More

The FEIN issue is trivial compared to the federal tax and transfer pricing issues you are creating.  I have formed and represented numerous international corporations, and I am not sure of your objectives.  You may want to seek the assistance of someone who can provide you with direction.  ... Read More

If you break a protective order, you can be found in contempt of court.  If you are found in contempt of court, you could be asked to spend some time in local government housing where you may meet some interesting new friends.  Instead of jail, the court could order a number of other remedies.  None are good.... Read More

Once the non-profit corporation is established, the governance of the entity is vested in the Board of Directors and the committee according to the Tennessee Non-Profit Corporation Act and the specific by-laws of the corporation.  As such, a representative is without any power to take any action solely in this capacity. This answer is not legal advice on your specific situation and does not establish the attorney-client relationship.  You should consult an attorney regarding your specific fact scenario.  ... Read More

He cannot open a new company under a different name to develop the same piece of software.  It is an unlawful use of the company's proprietary information and know-how, and the usurpation of a corporate opportunity unto himself.  The question i would have is does the company owe your partner any debt? and could he get to the same place by collecting on the debt and foreclosing on your asset, the software code.... Read More