The Rights of Shareholders

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When someone purchases stock from your corporation, they become a shareholder of your company. With that purchase comes numerous shareholder rights – and often these rights are misunderstood by the shareholders and business owners alike. As a company offering shares to your corporation, you should be aware of the rights of your shareholders. If an issue of rights does arise, contact a shareholder dispute lawyer right away.

Rights of Your Shareholders

• Appraisal – Most shareholders are granted appraisal rights. They may have the right to get an appraisal on the company in order to sell their stocks at a fair price. Appraisals usually only happen when a consolidation or merger occur, when a sale of shares or assets is made, or when an agreement affects the value of the company.
• Dividends – Part of the reward for investing in a company is sharing in dividends. Shareholders, based on their stock amount, have the right to receive an equal share of dividends.
• Gifts – A company cannot make a large gift of their assets without getting approval from their shareholders. That includes giving out bonuses, incentive plans, etc. that are not already pre-authorized under an employment contract.
• Inspection – Shareholders have rights when it comes to inspecting the company’s records and books. But, these rights are limited based on the state. If a shareholder wants the books inspected, you may want to consult a shareholder dispute lawyer to find out what limitations they have and in what instances they can legally ask to inspect the records and financials.
• Rights to Buy More – Typically individuals who already have shares have rights to buy additional stocks before they are offered to the public.

Hire a Lawyer Whenever You Have a Shareholder Right Dispute

Because the laws regarding shareholders are so complex, you should consult a shareholder dispute lawyer right away if a dispute does arise. An experienced attorney who specializes in partnerships and shareholders can help you identify what rights your corporation’s shareholders have and whether or not you have violated those rights.

Understanding the Obligations of Good Faith and Fair Dealings

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Every business deals with contracts and each contract has its own implied conditions. These conditions require each party to act in good faith, because failure to act in good faith could result in a breach of contract – and possibly a civil lawsuit.

What Does Good Faith Mean?
Good faith refers to the honesty in fact and that both parties agree to not lie, steal or cheat each other. For business owners who are selling products, that good faith behavior means that they are in compliance with safety and federal regulations and that they are being honest with the products they are bringing to the market.

By not acting in good faith, a negligent party could be held liable based on what is in their contract.

Examples of Acting in Bad Faith

• Not performing the action promised within the contract or cutting corners to get the task done – resulting in a subpar performance.
• Contracting with one party only to turn and use a competitor instead.
• Tampering with another party’s product in order to gain a competitive edge.
• Receiving an estimate and signing a contract based on that estimate, only for the other party to change the amount after the contracts are signed – and without giving the other party time to reconsider.

What if the Party Fails to Act in Good Faith?

If your business has entered into a contract and the other party refuses to act in good faith as promised, you should consult a San Antonio business lawyer right away. Just because the other party does not act in good faith does not necessarily mean your requirements of the contract are void; therefore, you may be obligated to still act in good faith – regardless of how the other party has behaved.

By hiring an attorney, you may be able to dissolve the contract agreement and possibly seek monetary damages from the party that did not act in good faith. Because contract law is very complex, an attorney is required to determine your liability, and the proper damages you can seek from the other party for not acting in good faith.

Texas Laws Regarding Non-Compete Agreements

Many businesses in Texas rely on the use of non-compete agreements as part of their employment contracts. These agreements require the employee to refrain from working for the competitor or within a specific industry after their employment with the company is terminated.

Generally, a non-compete agreement protects a business’s interest, but it must be within reason. Also, the employee gets something in return for signing this agreement. The purpose of the non-compete is to protect valuable company information, including trade secrets, marketing strategies, customer information or client lists, and even manufacturing processes.

Non-Compete Requirements in Texas

Texas requires that a non-compete not be burdensome on the employee. That means that if the non-compete is too broad, the courts may swing in favor of the employee because of the burden the agreement placed on that employee. Some examples of a non-compete being too burdensome include:

• Too large of a geographical area
• Too long of a time period
• Too broad of a term regarding profession or industry – such as stating the employee cannot work in “retail”

Non-Competes for At-Will Employees

At-will workers can be terminated at any time and they are not contracted with the company. The Texas Supreme Court now enforces non-compete agreements for at-will employees just as much as they do for contracted employees. If the employer shares confidential information with the employee, the non-compete agreement will be upheld in the courts.

While the at-will exception is great for employers, it also makes hiring more difficult. Employers must be cautious about hiring any employee with a non-compete for their at-will work in the past, and they should consult an attorney before hiring an employee to ensure they are not violating their non-compete.

An employment lawyer can help businesses and employees understand the Texas laws regarding non-compete agreements. Because non-compete violations are very serious – and costly – employers and employees needed to understand their rights.

Are You Protected with a Poor Man’s Copyright?

Freelancers and private individuals are under a misconception that they have copyright protection if they put their work in an envelope and mail it back to themselves. The idea behind this misconception is that the postmark on the envelope proves the date the work was created; thus, establishing the person as the first one to create it.

Unfortunately, this form of a poor man’s copyright offers little to no protection and most creative works are left up for public grabs until proper protection is put into place.

Copyright Registration Is Not Required

While mailing your work to yourself does not necessarily protect it, your work is still protected under U.S. copyright laws the moment it becomes tangible, such as a printed manuscript, recording, etc. But, without registration you do not have proof that you were the original creator of that work. By registering with the U.S. Copyright Office through your copyright attorney, you have the valid copyright protection. Also, if you want to sue for infringement and get the maximum rewarded damages, you need to have a registered copyright.

Proving You Were the First Person

The poor man’s copyright method is not a valid way to prove you were the first to create a piece of tangible work. The U.S. court systems do not recognize mailing yourself a copy as a copyright registration, because there is no proof the works were actually mailed in the envelope – after all, you could take any old envelope and stuff the work into it.

How a Copyright Attorney Can Help

While you may be tempted to rely on the poor man’s copyright, it is in your best interest to hire an attorney. An attorney can help you register your copyright – proving you were the first person to create it – and help represent your case if you need to sue someone for infringement. The only way to guarantee protection of your work is through a copyright – don’t rely on the common poor man’s misconceptions.

Does Your Company Need a Social Media Policy?

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These days it is hard to find an employee that does not have a social media account (or two). But, laws regarding social media are hazy at best – and still in the works. Most companies, however, are realizing how impactful social media can be on their brands, which is why they are creating social media policies to monitor posts regarding their business.

If you are on the fence as to whether or not you should create one, remember that a well-drafted policy could encourage positive branding online, and establish boundaries as to what employees can and cannot say.

Getting Started

You will need to consult several people to develop your social media policy. First, your human resources representative should be brought in to provide guidance on any employment issues. Next, your IT department should be consulted in regards to how they will monitor social media, restrictions they may place on computers, etc. Lastly, you need your business attorney San Antonio. A lawyer offers guidance on employment laws to ensure you’re not violating them with your new policy.

The Issues Facing Social Media Policies

When drafting your social media policy, you will find many issues. But, some things you will need to consider include:

• If you are trying to promote healthy use of social media or you want to monitor employee abuse of social media.
• Being aware that employment disputes could be posted on social media in the form of status updates, pictures or comments.
• Whether or not employees will be allowed to post on the company’s behalf via social media.

Contents of a Solid Social Media Policy

A company must assess their presence online and how social media will affect that. The goal of your policy is to create a positive image online and align your social media goals with your company goals. Next, you will want to include:

• HIPAA, trade secret clauses and non-disclosure information to protect valuable company secrets.
• Examples of what employees can and cannot post. Topics like substance abuse or racial slurs should be included in that list.
• How violators of the policy will be handled.
• What social media networks will be included in the policy?
• Specifics regarding what posts are prohibited from social media and any applicable penalties if someone violates it.

A business attorney in Houston should be consulted when drafting any type of company policy. Not only could you encounter employment violations, but you could have employee disputes that will arise due to your new policy. An attorney will provide you with guidance, help draft the policy and also create any necessary contracts to enforce it.

What You Need to Know About Business Contracts

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Contracts are legal agreements between two parties. They are enforceable by law as long as they meet the basic requirements – mutual consent, capacity, legality and consideration for starters. When a party breaches a contract, the other party can legally request damages.

Why Contracts are Important for Your BusinessContracts are used for a variety of day-to-day-business operations. From securing property to hiring employees, they protect your company. You can enter into contracts with employees, service providers, vendors, and even your clients. While it may seem friendlier to do business on a handshake, contracts are what protect your company.

Contracts are important because:

• They set a clear definition of the terms of the agreement, each party’s rights and expectations, as well as each party’s obligations. Also, a contract states the penalty each party will face if they choose to breach that contract.
• They prevent any misunderstandings. Handshake deals almost always end in a disagreement, because it is easy to misinterpret the facts or remember the details of what was said a few days later. Written contracts clearly state what was negotiated and agreed upon to avoid these situations.
• Contract terms and specifics are established. A business contract lawyer can help you write clauses that reserve specific rights, specify a term for the agreement, etc.
• Trade secrets are protected. Your business contract lawyer can create a non-compete clause that prevents the other business, individual or party from starting a business with similar products or services to yours.
• It protects your rights.

What Instances Require a Contract?

There are a variety of contracts you may use as part of your business. Some being very simple while others are highly complex and require a notarized signature. Some of the common contracts you may see include:

• Confidentiality
• Employment
• Franchise
• Lease or Purchase of Property
• Purchase of Goods
• Agreement for Work or Services

Why Contract Disputes Occur – and How to Avoid Them

Most contract disputes occur because the terms and conditions of the contract were never written down or were inadequately written. Oral and written contracts are enforceable, but written contracts are what help resolve business disputes out of court. Also, contract disputes often occur because the contract itself was not properly written – and left out important clauses leaving one party vulnerable.

The details and conditions put in a contract are what protect your business; therefore you should always hire an attorney to handle your contract creation. Before you reach an agreement, contact a business contract lawyer to learn about your options and see what additional details should be negotiated before it is put into writing.

Is It Trademark Counterfeiting?

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Trademarks are words and symbols that help identify your brand. That brand is then associated with your products, services and other goods. U.S. trademark laws were designed to protect consumers from brand confusion, but they also protect your business. Other companies cannot use your trademark as a way to confuse customers and it is illegal for anyone to use your trademark without your permission.

Trademark Counterfeiting: A Growing Trend

Counterfeit trademarks are becoming increasingly common. This is when a manufacturer creates products that look just like those made by your company – then, they attempt to pass them off as your trademarked goods.

Trademark counterfeiting is a serious issue, because consumers associate your products by your trademark. Therefore, if they purchase these misleading products and they are faulty or subpar, they could inadvertently blame your business. Trademark counterfeiting is very common with goods from other countries and while it seems harmless, it could be detrimental to your company.

What Happens if a Company is Guilty of Trademark Counterfeiting?

The U.S. takes counterfeiting seriously, especially counterfeit goods. They will seize those goods at the Customs Office and can impose criminal fines on the guilty party. In addition, the trademark owner, you, can sue the counterfeiting for those goods and the lost profits or damages that may have occurred – and up to three times the actual damages. This means high value rewards to your company if you can prove the company counterfeited your trademark.

Do I Need Intellectual Property Lawyers for Counterfeit Goods?

If you think someone has counterfeited goods under your trademark, you need intellectual property attorneys. Intellectual property attorneys will help bring the guilty party to justice and can advise you on your trade laws as well as rights. If you find a company has counterfeited goods, your IP attorney will then assist you with your lawsuit.

3 Tips for Giving to Charity through Your Estate Plan

It is not uncommon to want to leave some (or all) of your estate to charity. Even consumers with children still want to feel as though they’re giving back to their community, which is why they opt for charitable giving. Adding charitable contributions to your estate plan is a great way to leave a more meaningful legacy and you don’t have to be a millionaire to do so. But, you must be cautious about what charities you choose and how you go about it. Therefore, consult with your San Antonio estate lawyers before selecting a charity and use these three tips for giving to charity as part of your legacy.

Make a Gift in Your Will

The easiest way to give to your favorite charity is by setting a charitable contribution in your will. This amount, however, will not reduce your taxes, but may reduce taxable estate. So, not only will your heirs possibly receive more, but your estate could encounter less taxes.

Use Your Retirement Assets

You can also donate your retirement account to a charity. Just designate the charity of your choice as your beneficiary. Charities are exempt from estate and income taxes; therefore, they will receive 100 percent of the retirement value. That leaves your non-retirement assets to your children and other beneficiaries.

Do Not Forget to Talk to Other Beneficiaries

While you may want to donate to charity, you should discuss doing so with your other beneficiaries. This is because you do not want your beneficiaries to dispute your charitable giving and you will also want them to understand your reasons for leaving to a charity. You and your San Antonio estate lawyers should speak openly to other beneficiaries about your estate plan; that way there are no surprises later on. Be sure family members know you are trying to create a legacy for not only you, but your entire family through giving.

Can You Rescind a Contract?

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Terminating or cancelling a contract is not always easy. The purpose, however, is to restore both parties back to their original status before signing the contract. In order to rescind a contract, you must terminate the contract entirely – you cannot pick and choose portions to cancel. Rescissions are often used when issues regarding the contract arise – such as how the contract was formed.

What Circumstances Constitute a Termination?

To cancel a contract, a judge must determine there is a valid reason. Contracts cannot be cancelled just because you or the other party changed their mind. Instead, you need to meet specific criteria, including:

• Consent Issues – Both parties must agree to the termination of the contract. The consent to cancel should be provided in writing to the courts for validation.
• Contract Formation Issues – A contract must be drafted in accordance with the law and have a legally binding reason for creating the contract. If for some reason the contract was formed illegally, it may be cancelled. Common illegal contract formation issues include fraud, lack of capacity by one party, undue influence or duress, and a mistake.
• Public Interest Factors – If a contract is against the public or harms public interest, it may qualify for a termination.

Can the Court Deny a Rescission?

Yes. There are times when the courts may deny the termination of a contract, even if both parties agree. Some situations where the judge can deny your termination include, but are not limited to:

• Performance – One party has already started to perform their duties of the contract, such as making goods for distribution.
• Benefits – Another party has already received benefits from that contract; therefore, cancelling it would now impact that third party.

If a person has request monetary damages, the judge may also deny the termination. You can file for monetary damages after your contract is terminated, but not before.

How to Avoid Contract Terminations

Contract rescissions are very costly and time consuming – and there is no guarantee the courts will terminate them. It is best to hire a contract lawyer to draft your contracts and review other party contracts before you sign them. Because written contracts can be legally binding, you want to ensure you’re signing a good contract ahead of time – rather than deal with attempting to cancel it later.

More than Just Your Logo – Trademarks Protect Your Brand’s Identity

You have done a lot to establish your brand identity. You’ve created a brand that resonates with customers, identifies your products and makes you a trustworthy company to the market. In order to do all of that, you have spent a lot of time and money.

While you may think trademarks are just for your logo, they do a lot more than you might realize. A trademark protects your brand’s identity – and considering how much work you have put into creating it, that is something you cannot put a price on.

The Purpose of Using Trademarks

Trademarks are symbols, words, phrases even logos that distinguish themselves from others. When you register a trademark, it is protected and associated with your brand only – other companies or individuals who use your trademarked materials could be sued for infringement.

Trademarks, however, establish your brand. Think of companies like Starbucks, McDonald’s or even your local grocery store chain. They all have trademarked names, logos and possibly even slogans that make them easy to identify. When you see their trademarked material on their advertisements or products, you trust them, because you identify with that brand.

For a small business, a trademark is what customers look for when they are looking for a local business they can trust. As long as they have heard positive things about your business, they will work with you – and a trademark can prevent copycat companies from working under your business name (without your permission) and selling inferior services/products that tarnish your brand.

How a Trademark Lawyer Helps

A trademark protects your business, but sometimes you need extra help not only establishing your trademark, but protecting it. A trademark lawyer will help you through the application process – including researching other similar trademarks, filing your trademark, etc. But, an attorney can also prevent someone else from tarnishing your brand. Such as ordering a cease and desist on company’s operating under your trademarked logo or slogan – and preventing your brand identity from becoming a negative one.

Regardless of what you have established, a trademark is one of the best lines of defense in today’s economy. It keeps your brand recognizable, gives you a competitive edge, and protects your business.