Contractual notice is one of those simple concepts that can get very complex in practice, and have draconian consequences.

Real estate law, particularly Landlord-Tenant relationships, is loaded with notice requirements. Some examples are notices to renew or extend in a commercial lease. A simple notice clause in commercial leases is in fact not as straightforward as it may seem.

The law distinguishes “Given or Sent” from “Delivered or Received”

“The Agreement required that all notices be ‘given’ – not ‘delivered’ or ‘received’. The same paragraph provides that notice be ‘sent’ by registered mail, thus equating ‘sent’ with ‘given’, and emphasizing the lack of requirement for actual delivery. Estate of Crossman, 231 Cal.App 2d 370, 373.” Palo Alto Town & Country Village, Inc. v. BBTC Company , 11 Cal.3d 494, ¶21

The choice of language can be determinative, for example, in the all too common case of notice (renewal, extension, etc.) that is lost in the mail. Under “given or sent” language and interpretation, a notice mailed is sufficient…even if never received, which seems to contradict the very essence of notice, and yet does give effect to the true intent of the parties if it can be proven that notice was in facts “sent.” However, under “delivered or received” language, on the very same facts, the party that mailed the notice that was lost in the mail will be deemed to have not delivered notice, because notice was in fact never received by the intended party.

These are just two wrinkles that can arise in the relatively mundane notice clause of a commercial lease. However, they are important because effective or ineffective notice can drastically alter the economic relationship between the parties.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc |   LinkedIn | Facebook | YouTube

 

Sometimes employers and employees both find themselves saying, “Give me a break!”
Must an employer provide a rest break to a worker during the day?

The general rule is that a worker is entitled to a 10 minute rest break for every 4 hours work, and the employer must not prohibit the workers from taking such breaks. If the nature or circumstance of work prevent the employer from giving the break at the preferred time (i.e. in the middle of the 4 hour period), then the employee must still receive the 10 minute break at another time during the day.

But, an employee cannot unilaterally choose to take his 20 minute break any time that he or she wants. For example, an employee cannot pass on both breaks in an 8 hour day, in order to leave 20 minutes early. The employer can also require that the employee stay on the premises during his or her breaks.

If the employer does not allow a rest break, then the employee can file a wage claim against the employer and recover one hour of pay for each workday that a rest period was not provided. For large employers, the damages can spiral out of control very quickly.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc |   LinkedIn | Facebook | YouTube

Are you considering filing a complaint against a California Corporation for money owed to you or your clients? Who can be held liable? Can only the corporate entity be named as a defendant? Can individual shareholders, directors or officers also be named as defendants? Can the alter-ego doctrine be applied to non-profit corporations?

Generally, California corporate law encourages business ventures, risk-taking, and entrepreneurial activity by limiting liability exposure to the assets of the corporation.
But this is not an absolute protection. Courts will disregard the corporate entity, allowing for individual shareholders, directors or officers (i.e. the “alter-egos”) to be held liable in certain circumstances. This is also known as “piercing the corporate veil.”

It is well settled that California courts can pierce the corporate veil when both of the following two requirements are met:

  1. Unity of Interests – The shareholders in question have treated the corporation as their “alter ego,” rather than as a separate entity; and
  2. Inequitable Result – Upholding the corporate entity and allowing for the shareholders to dodge personal liability for its debts would “sanction a fraud or promote an injustice.” Automotriz del Golfo de California v. Resnick (1957)

In California, courts apply a factor-by-factor test to determine whether “alter-ego” liability is appropriate. These factors are laid out in the case of Associated Vendors Inc. v. Oakland Meat Packing, Co. (1962).

  1. Did the individual Defendant(s) act in bad faith?
  2. Did the individuals contract with another with the intent to avoid performance by using a corporate entity as a shield against personal liability?
  3. Did the individuals divert assets from a corporation by or to a stockholder or other person or entity to the detriment of creditors?
  4. Domination of the corporation by a few key individuals?
  5. Did the individuals and corporation use the same office or business location?
  6. Did the individuals and the corporation employ the same attorney?
  7. Did the individuals use the entity to procure labor, services and merchandise for another person or entity?
  8. Did the individuals fail to adequately capitalize the corporation?
  9. Did the individuals fail to maintain minutes or adequate corporate records?
  10. Will there be an inequitable result if the court fails to pierce?

The burden of establishing alter-ego liability is on the plaintiff. Absent factors supporting individual liability, courts are reluctant to pierce the corporate veil because “alter-ego liability is fundamentally at odds with the general rule that dejure (ieas a matter of law) corporation is a legal entity separate from its founders and owners; and the law specifically permits owners to incorporate a business for the very purpose of shielding them from its liabilities.” Las Palmas Associates v. Las Palmas Center Associates; Rutter Guide.

However, California courts have “followed a liberal policy of applying the alter-ego doctrine where the equities and justice of the situation appear to call for it.” First Western Bank & Trust Co. v. Bookasta (1968). In practice, the alter-ego doctrine is usually applied “where there are only a few shareholders and they have not respected their corporation’s separate identity.” When evaluating alter-ego liability, courts do not make a distinction between forms of corporations, and the doctrine applies equally to non-profit corporations and for-profit corporations.

Case References: Associated Vendors Inc. v. Oakland Meat Packing, Co. (1962)Automotiz del Golfo de California v. ResnickLas Palmas Associates v. Las Palmas Center AssociatesFirst Western Bank & Trust Co. v. Bookasta

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc |   LinkedIn | Facebook | YouTube

 

Exemptions From Federal and State Securities Laws:

Are you a small business owner in California looking for a legal way to raise capital without being a licensed broker-dealer? What federal and state securities laws matter? Do you have to file any documents with the federal or state government? Does your company qualify for an exemption?

Federal Laws:

In light of the Great Depression, President Franklin D. Roosevelt created the Securities Exchange Commission as a means to promote investor confidence. Two of the safeguards that were included in the New Deal were the Securities Act and the Exchange Act.

Generally, the Securities Act requires companies raising capital to file a registration statement with the SEC. This is to provide investors with information that can assist them in making their investment decisions. The Exchange Act requires companies to file reports with the SEC. These reports include information about business operations, financial conditions, and management.

It is important to keep in mind that your company must be in compliance with both federal and state securities laws. This is because a particular offering may be exempt from a federal law but not exempt from a state law.

Exemptions:

Your company may qualify for an exemption provided within these laws. This would mean that you do NOT have to satisfy the SEC’s registration and reporting requirements. Below is an exemption from California State Law that may be applicable to your company. (Please note that for any sort of securities law exemption, it is necessary that you meet ALL of the requirements of the exemption.)

SEC Rule 1001 – California Limited Offering Exemption

Under this rule, California companies are not required to satisfy the SEC’s registration requirements for offers and sales of securities if and only if they meet the following requirements:

(a) The securities are in amounts of up to $5 million.
(b) The offering is made to a “qualified purchaser.”

Web reference. Please visit http://www.sec.gov/ for source materials on this topic.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc |   LinkedIn | Facebook | YouTube

 

Are you thinking about investing as a minority shareholder in a company? Perhaps you are thinking about taking on outside investors for your current company? What are your minority shareholder rights as an investor? What should you be concerned about as a majority shareholder?

The Minority Shareholder

Understandably, minority shareholders often are concerned that their rights and interests will be trampled by those of the majority shareholders. It seems that corporations appear to have a greater incentive to cater to the needs of their more substantial investors. However, in California, minority shareholders possess certain crucial rights that cannot be compromised by corporate bylaws or majority shareholders actions. One of the most valuable rights for shareholders is the right to access information about the corporation. In particular, shareholders of California corporations have rights to inspect two different sets of records: (I) record of shareholders; and (II) accounting books, records, and minuts of proceedings.

Inspection of the record of shareholders

Minority shareholders have the right to inspect a corporation’s record of shareholders. Those who hold either: (a) 5% of the shares; or (b) 1% of the shares and have filed a federal Schedule 14B relating to the election of directors, have an absolute right, on 5 business days’ notice, to both: (1) to inspect and copy the record of shareholders; and (2) to obtain a current list of the names, addressses and share holdings of the voting shareholders (Corp. C. 1600(a)(b)). Furthermore, any shareholder who does not qualify under either (a) or (b) above, with a written demand, has a right to access a corporation’s record of shareholders. BUT if and only if the acquisition of such records is directed towards an end deemed reasonably related to the holder’s interest (Corp. C. 1600 (c)).

Inspection of the books and records

Minority shareholders also have the valuable right to inspect accounting books, records, and minutes of proceedings. Inspection of said information is provided if and only if the acquisition of such information is directed towards an end deemed reasonably related to the holder’s interest (Corp. C. 1601 (a)).

These are important rights for all shareholders to keep in mind. Indeed, these rights may not be limited by either the bylaws or articles. If a lawful demand for inspection is refused without justification, the superior court can intervene and compel the corporation to forfeit the requested information. In some cases, the courts have exercised their power to award complaining shareholders with reasonable expenses, including attorneys’ fees. (Corp. C. 1600 (b)).

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc |  LinkedIn | Facebook | YouTube

 

The leveraged buy out (LBO) and management buy out (MBO) are common tools of American businesses whereby an acquiring entity will purchase its target through a combination of debt and equity. No brilliance there, right? The clever part, however, comes in where the target company (i.e. its assets) are given as collateral for the debt. In essence the target helps facilitate its own acquisition. This is accepted as normal in the U.S., presumably under the belief that it leads to the most efficient allocation of capital and assets.

Across the pond though, the UK market takes a dim view of such financial moves — it is in fact unlawful for a company to assist in the acquisition of its own shares. This is commonly referred to as the “no financial assistance” rule. Assistance is defined generally as a guarantee, indemnity, gift or security provided to the acquiror. Aside from apparent common sense foundation that if you can’t afford it on your own, you shouldn’t buy it, this rule is primarily designed to protect creditors and the capital inside the target corporation. It is not a blanket prohibition however, and the UK provides for a “whitewash” test (what we would call a “safe harbor”). The “whitewash” rules will not be covered in this posting.

France and Germany similarly have rules against financial assistance for much the same policy reasons as the UK. France allows no whitewash, whereas German transactions can be structured generally to comply with the legal tests.

There remain open issues as to whether and how the emergence of

cheap cialis

the EU will standardize national corporate legal policies. For now, transactions within a country are controlled by that country’s corporate legal structure. As shown here, Europe can be quite a different playing field that the U.S.

[Many thanks to Focus Europe Summit 2004, and Gibson, Dunn and Crutcher LLP for source materials on this topic.]

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc | LinkedIn | Facebook | YouTube