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Private company clients frequently ask us about granting compensatory stock options to their founders, employees and other service providers, including board members, consultants and advisors. Options and other equity awards...more
Affiliation is a key concept for small business owners who want to qualify for federal contracts and programs administered by the Small Business Administration (SBA) or the Disadvantaged Business Enterprise (DBE) or Airport...more
Berman v. Comm’r, released on July 16, 2024, is a great example of making lemonade when life hands you a lemon. Although the taxpayers lost the federal income tax deferral of a stock sale to an employee stock ownership plan...more
This article is the second in our series on equity-based compensation intended to assist employers with answering a common question: What type of equity compensation award is best for our company and our employees?...more
On June 24, 2024, the U.S. Court of Appeals for the Second Circuit decided Packer ex rel. 1-800-Flowers.com, Inc. v. Raging Capital Management, LLC, reversing a district court decision that had held that a shareholder...more
Several recent lawsuits, and comments by the U.S. Securities and Exchange Commission (“SEC”) and Federal Trade Commission (“FTC”), underscore the increasing litigation and regulatory scrutiny concerning the use of artificial...more
Many of us have encountered variations of the following scenario: a parent owns and operates a business; one or more of their children are employed in the business; as the children mature and become more experienced and...more
Limited liability companies (LLCs) offer significant tax flexibility – for one thing they can elect to be treated as disregarded entities, partnerships, C corporations, or S corporations, and can even shift between those tax...more
Recently, in Colon v. Bumble, the Delaware Court of Chancery held that certain provisions in the charter of Bumble, Inc. (Bumble), which contemplated that each share of stock carried either one vote or 10 votes depending upon...more
A recent opinion from the Delaware Court of Chancery reaffirmed a Delaware corporation’s ability to create a class of stock with voting power that is based on a formula in the certificate of incorporation (Charter) or on...more
The Eighth Circuit Court of Appeals recently affirmed the decision in Connelly vs. United States, holding that the fair market value of stock in a closely-held corporation, for purposes of valuing that stock held by a...more
As discussed in this Cooley Go article on secondary sale transactions of private company stock, a tender offer is one of the ways in which companies can provide liquidity to their stockholders. This article will dive a bit...more
There are two primary ways to structure the taxable purchase and sale of an incorporated business. The parties may engage in an asset acquisition, in which the buyer purchases assets directly from the target corporation....more
The latest proposed amendments to the Delaware General Corporation Law (DGCL) will simplify the process for ratifying defective corporate acts; eliminate or reduce the stockholder vote required to authorize some types of...more
MiniCorp has five shareholders, all of whom are employees. Each shareholder’s employment agreement states that they are an at-will employee of MiniCorp, and the shareholders agreement provides that when a shareholder’s...more
The proposed 2023 amendments to the Delaware General Corporation Law (DGCL) approved by the Delaware State Bar Association are intended to address a number of practical issues facing corporations and their counsel and to...more
On 20th December 2022, the Cayman Islands Court of Appeal (“CICA”) delivered its second judgment in the matter of Changyou.com Limited v Fourworld Global Opportunities Fund Ltd & others (“Changyou.com case”). The CICA...more
In recent years, the utilization of Section 1202 has grown considerably. Many businesses are formed as corporations at conception, private equity investors calculate the tax benefits from Section 1202 into their ROI...more
SPAC Companies May Need to Evaluate Stock Structure in Wake of Delaware Court of Chancery Ruling - Companies that previously became public by merger with a Special Purpose Acquisition Company (“SPAC”) may need to...more
The Delaware Court of Chancery yesterday denied a motion to dismiss a class action alleging that the directors and sponsor of a special-purpose acquisition company (a “SPAC”) breached their fiduciary duties by disloyally...more
Proferida dentro del expediente #26084 en sentencia de 10 de noviembre de 2022, al analizar la legalidad del artículo 3 del Decreto 1457 del 12 de noviembre de 2020, que regula el tratamiento de los dividendos y...more
On 1 October 2022, an amendment to Act No. 37/2021 Coll., on keeping record of ultimate beneficial owners (the "UBO Act"), 1 came into force which, in order to ensure compliance with the pertinent European Directive,2...more
In a recent judgment in the case of Re Changyou.com Limited, CICA (Civil) Appeal 6 of 2021, delivered on 16 September 2022, the Cayman Islands Court of Appeal has applied the interpretative provisions of section 25 and...more
Given the significant decline in the stock prices of many companies over the past several months of 2022, a number of companies are reassessing their equity programs and considering repricing outstanding employee stock...more
Among the recently enacted changes to the Delaware General Corporation Law (DGCL) that were described in our August 1, 2022 Client Alert are some that provide more flexibility for boards of directors of Delaware corporations...more