Start-Up Entrepreneur Series: Founders Stock

In the Start-Up Entrepreneur Series, I will be taking a deeper look into some of the most common questions early stage founders face in putting together and operating their new businesses.  

The Start-Up Entrepreneur Series will be published each Wednesday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

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Last week we discussed the nature of a company’s operational organization through a discussion of its officers and directors.  This week we’ll take a deeper look at another major organizational question (and one whose answer is needed to elect those officers and directors):

“How should the founders split up the Company?”

That question, as it turns out, is difficult to answer before a series of smaller, but equally important, questions are considered.

Continue reading “Start-Up Entrepreneur Series: Founders Stock”

Start-Up Entrepreneur Series: Directors and Officers

In the Start-Up Entrepreneur Series, I will be taking a deeper look into some of the most common questions early stage founders face in putting together and operating their new businesses.  

The Start-Up Entrepreneur Series will be published each Wednesday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

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Last week, we talked about the various documents that make up the governing “law” of a corporation (or LLC).  This week, we’ll talk about the individuals that govern the actions of a corporation: the Board of Directors and Officers.

(Note that because of the inherent flexibility in the LLC structure, a discussion of an LLC’s management at a generalized level is not possible.  Know that an LLC can be organized as we discuss below (and that many do in order to emulate the more understood corporate form), but that it can also be organized in myriad other, distinct ways.)

Continue reading “Start-Up Entrepreneur Series: Directors and Officers”

Start-Up Entrepreneur Series: Governance Documents

In the Start-Up Entrepreneur Series, I will be taking a deeper look into some of the most common questions early stage founders face in putting together and operating their new businesses.  

Start-Up Entrepreneur will be published each Wednesday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

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The day-to-day operations of a business are dependent on many things: market trends, customer relations, vendor management, the CEOs mood.  But from a legal perspective, the operations of a company (whether a corporation or LLC) are governed at the highest level by the interactions of two or three primary sets of rules set forth in only two or three primary sets of documents.  While we’ll get into the details of what these rules can permit (or prohibit) later in the series, it is important, first, to get an overview of how they generally interact.

Continue reading “Start-Up Entrepreneur Series: Governance Documents”

Start-Up Entrepreneur Series: Corporation or LLC? (Part II)

In the Start-Up Entrepreneur Series, I will be taking a deeper look into some of the most common questions early stage founders face in putting together and operating their new businesses.  

Start-Up Entrepreneur will be published each Wednesday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

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This post is a continuation of our discussion on the differences between corporations and LLCs (if you missed Part I, check it out here).  Note: As I did not want to split this discussion up over three weeks, this post is a bit longer than most.

How likely are you to follow “corporate formalities”?

One of the primary purposes of setting up a new business entity (rather than just operating as a “sole proprietorship” or similar “individual” form) is to protect yourself and your investors from liability for the actions of that entity.  As I tell it when giving presentations on forming a business: you set up a corporation (or an LLC) to prevent someone from seizing your house if your company gets sued.

Continue reading “Start-Up Entrepreneur Series: Corporation or LLC? (Part II)”

Start-Up Entrepreneur Series: Corporation or LLC? (Part I)

In the Start-Up Entrepreneur Series, I will be taking a deeper look into some of the most common questions early stage founders face in putting together and operating their new businesses.  

Start-Up Entrepreneur will be published each Wednesday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

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Perhaps the most important early question facing the start-up entrepreneur is simply “what is it that you want this enterprise to look like”?  We’ll be discussing boards, officers, equity, contracts, and other organizational questions in more detail later in the series, but the most fundamental of these is whether the entity should be organized as either a corporation or a limited liability company (“LLC”).  (While there are other forms, they are usually only pertinent to the most special circumstances.)

Continue reading “Start-Up Entrepreneur Series: Corporation or LLC? (Part I)”