Lexis Nexis Has Nominated The Business Law Blog as a Top 25 Blog Candidate and You Can Help

by Dan Ryan on September 2, 2010

Okay, everyone – it is time to get interactive!  I received an email this week that Lexis Nexis has selected my blog as a nominee for one of the top 25 blogs in the Business Community.  First of all, I am very excited and humbled to be selected.  I, of course, know many of the other blogs on the list because I am a regular reader.  So to be nominated in that group is truly an honor.

I started The Business Law Blog to help educate startups, small businesses, investors, and other interested readers.  As a practicing business law attorney, I help my clients on a daily basis to demystify the legal hurdles that their businesses face and help them navigate the path from startup to exit.  I share many of those insights regularly on this blog to help entrepreneurs and companies focus less on the law and more on minding their business.

Here is how you can help.

The Lexis Nexis folks have set up a site with links to all of the nominees (or see the logo on the right side of this page).  You can vote for your favorites by adding a comment to the bottom of that page.  In order to comment, you have to register, but (i) you don’t have to be a lawyer, (ii) it is free, and (iii) they have adamantly assured us that there will be no solicitations.  So you have nothing to lose and you can rest easy knowing that your vote helped this blog reach a broader audience.  It should only take you a couple of minutes.

The initial voting period for the Top 25 blogs is open until October 8, 2010.  After the top 25 blogs have been announced, a Top Business Law Blog of the Year winner will then be chosen by the voters and by a select panel of judges (“Idol”-style).  So vote for your favorites, and if Daniel J. Ryan’s The Business Law Blog is one of them, I will be ever so grateful.

And while you are at it, take a moment to post a quick comment here or send me an email with topics that you would like to see addressed, because I am always here to serve.  Have you been wrestling with a particular legal problem?  What issues is your business facing?

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The Ghost of Par Value and its Real Effect on Startup Businesses

by Dan Ryan on August 30, 2010

Par value is one of those legal mysteries involved in forming a business that entrepreneurs have never heard of and ten minutes after incorporation, may never consider again.  However, I ran into a situation recently where it mattered to one startup company (at least for a moment).

For a quick bit of history, par value is an anachronistic concept where the company sets a stated value on each share of stock it authorizes.  States allow that par value to be any any amount, but typically it is set at zero or some very small value.  In the past, this amount had legal effect and represented that amount that was originally paid for the stock and made up the initial capital of the company.  However, now, it has little import aside from some minor accounting issues and calculating state taxes in some states (like Delaware).

I am working with a startup that was incorporated in Massachusetts and is now considering a reincorporation in Delaware.  The  founders originally choose to have “no par value” as is permitted in Massachusetts and did not give another thought to it because of what I stated above and because annual fees for corporations in Massachusetts are not based on par value.

When reincorporating in Delaware, the founders increased the number of shares (to provide some flexibility with investors and with employee equity plans) and assumed that the company would use the same no par value stock.  But in Delaware, there are two methods for calculating the franchise taxes that the company must pay every year.  Without going into the particulars of each of the calculations (because you would fall asleep on your keyboard), the franchise tax with stock at a par value of $0.01 per share resulted in an annual franchise tax of $350.00 whereas the same amount of stock with no par value could result in a franchise tax of $75,075!

The bottom line. In thinking of par value, do not think any more than this: just go with par value of $0.01 or less and don’t think about it again.

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Could the Recent Financial Reform Make it Harder for Your Company to Raise Funds

August 26, 2010

The recently enacted financial reform law (the “Dodd-Frank Wall Street Reform and Consumer Protection Act” for the sticklers out there) impacts a range of financial services and companies in the way they do business.  For startups and small businesses, it may just make it harder for you to raise funds.  That’s because the Act changes [...]

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Best of Both Worlds: Converting Your Startup From a LLC to a Corporation

August 25, 2010

Entrepreneurs often ask my opinion on which type of entity is best for a startup or small business and, while I have written about this before, I generally say that one size never fits all.  That choice is made by each company depending on founder structures, short- and long-term planning, and, of course, tax.  I [...]

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Of Shoestrings and Bootstraps: How to Start a Business Without Investors

August 23, 2010

As a follow up to my recent post on starting a business without breaking the bank, here is another example of a successful business that is being successfully built without angels, venture capital, or other outside investors.  For this entrepreneur, maintaining control over decision-making and keeping the employees engaged through their own ownership stakes seem [...]

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“$100 and 100,000 hours”: Launching a Startup Doesn’t Have to Break the Bank

August 16, 2010

I had a meeting today where we talked about the economy and the environment for entrepreneurs, and while the uncertainty in the economy is certainly not helping, the outlook is not all bad.  During the last two recessions in the early 90s and the early part of this century, new businesses sprang up in a [...]

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Selling to Grow: How Selling Your Business May Help It Thrive

August 10, 2010

Startups often face a tipping point – to borrow a term from Malcolm Gladwell – where they have developed their business past the initial startup phase and now need to expand in order to remain viable. Some entrepreneurs take that opportunity to sell and move on to a new venture. Others founders will need to [...]

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Leave ‘Going it Alone’ for Euchre and Call Your Lawyer Already

July 14, 2010

First off, for those of you who are not from the midwest, Euchre is a card game.  And contrary to the views of my (NJ-born) wife, it is a great card game.  It is played with four people on two teams.  You work with a partner to choose trump over your opponents and hope that [...]

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Turning up the (Flame-Broiled) Heat: How an effective franchise organization should NOT be run

May 17, 2010

I have commented previously on the ongoing feud between Burger King management and its franchisee association, which represents most of the franchisees in the Burger King system.  It appears they have not learned their lesson and are still going at it. According to a report in the Wall Street Journal, the leaders of the franchisee [...]

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What Legal Issues to Watch For When Negotiating Your Commercial Lease

May 12, 2010

As I reviewed another commercial real estate lease this week, I was reminded that negotiating a commercial lease is often a challenge for tenants because each one is so different.  And there is often a difference between negotiating business terms and legal ones.  But the differences can be important.  This is why: //

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