Posts made in June, 2013

What’s with Delaware?

Posted by on Jun 11, 2013 in Your Entity

As a startup who’s in the initial stages of forming an entity, or as a current business owner with an entity already in place, you may wonder at some point why so many people decide to incorporate or form their LLC’s in Delaware, rather than their home state. So, what is it with Delaware?  What makes Delaware so attractive from a business owner’s standpoint?  There are many answers to this, many of which are too complicated or boring to get into in a forum such as this, but there are many reasons why you may want to consider incorporating your company or forming your LLC in Delaware.  While we highly suggest you discuss your business plans with an attorney before making the decision, we thought we would at least highlight some of the reasons why people choose to use Delaware, rather than–say–Tennessee where we are located, to form their LLC’s.  Given the breadth of the topic, we will stick with LLC’s for now and address Corporations later. A recent study in the Oregon Law Review** discusses the top reasons cited by attorneys who recently chose Delaware as their state for forming an LLC. Chief among the reasons for choosing Delaware are: 1) Judicial infrastructure: development of LLC case law and perceived judicial expertise; 2) Freedom of contract and the ability to waive fiduciary duties in Delaware; 3) Limitations on the rights of creditors of members; 4) Limitations on the rights of transferees of membership interests; 5) Less of a likelihood for “piercing the corporate veil” and losing limited liability; 6) Less rights given to minority interests. *Note: Please understand that just because we cited these reasons for choosing Delaware does not mean that these features are not also present in Tennessee’s or some other state’s LLC statute.  We list them only because these were the results of the survey discussed in the Oregon Law Review.  Again, if you’re curious about how your current LLC structure may fit in or relate to the Delaware structure, please contact an attorney. **The name of the article is “Why Delware LLC’s?,” Franklin A. Gevurtz.  91...

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UPDATE!

Posted by on Jun 7, 2013 in Startup, Update!

The Revised Tennessee Business Corporation Act (“TCBA”): NOTICES IN ENGLISH The TCBA sets forth laws governing for-profit corporations in the State of Tennessee.  In order to ensure that the TCBA was up-to-date in terms of its applicability to modern business conduct and operations, revisions to the TCBA went into effect on January 1, 2013.  One change that may affect how corporations in Tennessee conduct business pertains to general notices which, according to the TCBA, corporations and shareholders must provide under certain circumstances.  As of January 1, 2013, all notices and other communications must be in English unless agreed upon by the sender and the recipient.  (TCA 48-11-202). Given the influx of non-native English speakers into the State of Tennessee, as well as the increasing presence of foreign-owned and affiliated corporations, this language requirement could end up affecting more businesses than one would otherwise suspect—especially those closely held corporations which are owned or managed by individuals for whom English is a second language. Therefore, when drafting corporate documents or when communicating in writing, it is important for corporations (including their shareholders, managers and directors) to communicate in English if they have not clearly established in writing, whether in the communication itself or in the corporation’s bylaws, that another language is...

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Welcome to the Chambliss Startup Group Blog

Posted by on Jun 5, 2013 in Startup

We are excited to launch our Startup Group’s blog, and we hope that our readers find the information we share helpful, if not entertaining! As part of our efforts to help entrepreneurs and small business owners with their legal and business needs, we will be posting periodic blogs with tips, pointers and legal updates which we believe could be helpful to those who are starting a business or operating a relatively new business.  We hope to get to know you, but first here’s a little bit about us: WHO WE ARE: We are a group of attorneys with a variety of expertise from the Chambliss law firm who love meeting, hanging out, learning from and helping entrepreneurs and startups. WHAT WE DO: We hold regular legal clinics and host seminars at a variety of locations around town.  We also love to have a good time, so we host periodic Startup Socials where entrepreneurs and like-minded innovators can come hang out, eat, drink and network in a casual environment. WHY WE DO IT: We do this because we are passionate about our city and region and want to be a part of the progress and innovation. WHAT WE WANT: We want to meet and get to know you, hear what you’re passionate about, learn about your current or future business and help you in any way we can–even if it’s making a simple introduction or recommending a good restaurant to patron or a good way to enjoy our city. We welcome any feedback and discourse, so please do not hesitate to contact us.  Also, check out our website: https://www.chamblissstartup.com/  and come visit us on Facebook (“Chambliss Startup Group”) and follow us on Twitter:...

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