You may have already heard of the Corporate Transparency Act (CTA). It is a new federal law requiring most businesses to register with the Financial Crimes Enforcement Network (FinCEN). Congress designed the CTA to combat money laundering and enhance corporate accountability. This post will provide an overview of how to comply with the CTA.
Many goodcounsel clients start off in businesses as limited liability companies, enjoying the flexibility and tax-efficiency that this type of entity offers. A lesser known but quite significant advantage of LLC’s is the ability to provide incentive equity in the form of “profits interests.”
One piece of received wisdom that, with experience, I’ve come to question is that convertible notes and their stepsiblings, Simple Agreements for Future Equity (“SAFEs”), are “simple.” Yes, the documents for these types of investments are generally quite short and deal with fewer issues, so they are (as we’ve noted in the past) easier and less expensive to generate than equity documents (which is the main reason for their popularity). However, I’ve come to recognize many subtleties in how convertible instruments operate; there’s more complexity than meets the eye.
In this post, I’d like to address one such subtlety: the difference between a postmoney and a premoney valuation cap. The difference results in resoundingly divergent economics.
In my previous post about AI (specifically, AI large language models or “LLMs”) and its impact on the legal profession, I concluded that the current versions of LLMs would not replace lawyers but could serve as very able assistants. As our friends at Clausebase put it in a recent webinar: AI can take over a great many human tasks on the “production” side but the lawyer is still indispensable in carrying out key “creative” work.
Illinois employers take note: Illinois recently joined two other trailblazing states (Maine and Nevada) in requiring employers to provide a minimum amount of paid leave for employees. Thanks to the new Paid Leave for All Workers Act (the “Act”), effective on January 1, 2024, employees working in Illinois (but not Cook County) will earn and accrue up to 40 hours of paid leave each 12-month period. Employees working in Chicago are already, and will remain, subject to the Chicago Paid Sick Leave Act, and those in Cook County have the Earned Sick Leave Ordinance.
“Dilution” is one of the most discussed topics in the startup community. goodcounsel often advises startups on the implications of dilutions. In this post we describe some common scenarios, and explain what happens in terms of dilution.
In the olden days, customers signed agreements using quill and ink; for many, a handshake sufficed.
The behemoth General Data Protection Regulation (GDPR) governs the European Economic Area*. By contrast, no federal privacy regulation applies across all U.S. states.
A company must comply with regulations of the states in which it does business. As a practical matter, compliance is geared towards the state with the most stringent regulations. Effective January 1, 2020, the California Consumer Privacy Act (CCPA) remains the most comprehensive data privacy regulation in the U.S. (Maine and Nevada also adopted data privacy regulations recently, but both are narrower in scope than the CCPA.)
Much has been written about CCPA, and this post does not cover all (or even most of) the nuances of this law. Our goal here is to help you understand enough about CCPA to determine if it might apply to your business, or if you need to consult an attorney who can make this determination.