The biggest mistake a company can make when issuing stock
Wednesday, October 27th, 2010Whether issuing stock to a consultant in exchange for services or selling stock to an investor, never use percentage ownership without explicitly tying the percentage to a date or, better yet, a specific number of shares.
Let’s say your company hires a consultant and agrees that he’ll receive a 3% ownership stake in the company in [...]
Legal Basics: Vesting
Wednesday, October 13th, 2010When companies issue equity – particularly when it is to employees or other service providers – they sometimes subject the equity to various restrictions that lapse either (a) over time (so long as the person continues to work for the company) or (b) upon the occurrence of specified events. “Vesting” occurs when the restrictions lapse [...]
Common Contract Terms: Assignment & Change of Control
Monday, October 4th, 2010Assignment and Change of Control provisions address when a party may transfer its obligations under a contract to someone else, either directly, as when a party to the contract assigns its obligations to a third party, or indirectly, as when a party to the contract is acquired by a third party. Many contracts prohibit either [...]