Fast-growing private companies are exciting to observe as outsiders, but on the inside the company founder has the challenge of securing enough capital to fuel the rapid growth of the business. The company’s continuous need...more
Conflicts between co-owners in private companies are common, but the vast majority are worked out through dialogue and negotiation. When these internal conflicts cannot be resolved, however, minority investors may file suit...more
Spin-offs have become increasingly popular with innovative companies as a method of unlocking shareholder value, but the transaction is not always tax-free, particularly for international employees holding equity awards or...more
When divorcing couples hold ownership interests in private companies as part of their marital estate, they will have to address a number of business issues related to these interests in their divorce settlement. Planning...more
Hindsight can be a wonderful thing, especially if hard-earned lessons are adopted by others who are willing to learn from past mistakes. When private company owners and investors share with me some of the wisdom they have...more
Business owners of private companies invest huge amounts of time and resources in their business, which may include the bulk of their financial capital. For owners who do not want most of their net worth to remain tied up in...more
Private company owners strive for success but getting there is not an easy or straight path. I have been working closely with business owners now for more than 40 years, and I have been reflecting on the key character traits...more
Majority owners of private companies have many important decisions to make, but one of their most impactful will be selecting the people to serve as the company’s managers (for LLCs) or as directors on its board (for...more
The one who has the gold often makes all the rules, but the majority owner of a private company who has minority partners in the business does not have complete freedom, because majority owners owe duties that apply to their...more
Offshore Trust and Estate Litigation Update Series – Part II - Following on from Part I of this series which summarised the Cayman Court’s consideration of a trustee’s application for the “blessing” of a “momentous...more
The ability to receive an income tax deduction for donations of private company stock can be a useful tax planning tool for founders. Assuming the stock has been held for more than one year, a founder can generally deduct the...more
Changes and trends in private company equity incentive plan terms over time - A client who remembered equity plans from Silicon Valley in years past asked about what has changed in private company equity plans over time....more
The enactment of Internal Revenue Code (the “Code”) Section 409A has resulted in significant challenges for private companies that award employee stock options. Under the final Treasury regulations, stock options that are...more
Private growth companies have ups and downs – only rocket ships tend to go straight up. Therefore, it can be difficult for an investor holding a minority stake in a private company to know whether a challenging time for the...more
Management- und Mitarbeiterbeteiligungen sollen eine wirtschaftliche Teilhabe am Erfolg des Unternehmens vermitteln. Sie schaffen interest alignment mit den Gesellschaftern und bilden daher ein effektives Instrument zur...more
The seven-year anniversary of the Texas Supreme Court’s decision in Ritchie v. Rupee has come and gone, and the court’s holding from 2014 remains the law: Minority shareholders in Texas private companies do not have a cause...more
Disagreements are common between business partners in private companies, but most do not lead to a partner exit. When partner conflicts become severe enough to warrant a business divorce, however, majority owners and minority...more
I. Introduction - As a common law jurisdiction, Ireland’s legal system is similar to that of the US and the UK and businesses can be carried on in Ireland in several different ways, including as sole traders, partnerships,...more
Welcome to the fifth edition of our Private Client Bulletin, bringing you the latest private client and trust news and insights from Bermuda, the Cayman Islands, BVI and Asia. In this issue, we have several notable...more
What to expect in a secondary market transaction - You formed and financed an emerging growth company or startup, you hold unregistered shares of a private company not listed on a national securities exchange—but you need...more
I. Introduction - As a common law jurisdiction, Ireland’s legal system is similar to that of the US and the UK and businesses can be carried on in Ireland in several different ways, including as sole traders,...more
As we have noted in previous posts, it can become critical for the majority owner of a private company to remove a business partner who holds a minority ownership stake in the business and who is causing major dysfunction in...more
Amid intense focus on investor liquidity (and paths to potential liquidity) in private companies, we provide an update on developments around direct listings as an alternative to traditional IPOs in the United States. On...more
The Main Street Lending Program, intended to provide credit support to small and medium sized businesses, became operational on July 6, 2020.It includes many borrower-favorable economic terms, including a 5-year term, a low...more
In the past weeks, many companies, both public and private, have seen their stock prices and values decline because of the economic disruption caused by COVID-19. As a result, outstanding stock options may no longer provide...more