Table of Contents

• 1. What Is Form D?
• 2. Regulation D Exemptions – Federal vs. California
• 3. Who Must File Form D in California?
• 4. �䲹�����ڴǰ��Ծ���’s Notice Filing Requirements
  • a. Filing Form D with California DFPI
  • b. Pay the Required Fee
  • c. How to File
• 5. Information Required in Form D
• 6. Timing and Deadlines
  • Federal Deadline:
  • California Deadline:
• 7. What Counts as a “Sale” in California?
• 8. Accredited Investor Rules in California
• 9. What Happens If You Don’t File in California?
• 10. General Solicitation Rules in California
• 11. California-Specific Forms and Resources
• 12. California vs. Other States
• 13. When to Amend Your Form D
• 14. Best Practices for Startups in California
• 15. Common Mistakes in California Offerings
• 16. Do You Need a Lawyer?

Raising capital is a critical step for startups, especially in a state like California, home to Silicon Valley and thousands of ambitious entrepreneurs. While federal securities laws provide exemptions for private offerings through Form D, California has its own laws and regulations that you must follow — known as Blue Sky Laws.

This article breaks down everything you need to know about Form D as it applies to California-based startups, investors, and legal professionals, with a special focus on compliance with California securities regulations.

1. What Is Form D?

Form D is a short filing with the U.S. Securities and Exchange Commission (SEC) that must be submitted by companies that raise capital without registering their securities, relying instead on an exemption under Regulation D of the federal Securities Act of 1933.

It’s a notice filing, not a full-blown registration — meaning it’s primarily about informing the SEC (and applicable states) that a private securities offering is taking place under one of the Regulation D exemptions.

2. Regulation D Exemptions – Federal vs. California

Under federal law, there are three common Regulation D exemptions:

• Rule 504 – Up to $10 million, limited solicitation
• Rule 506(b) – Unlimited capital, up to 35 non-accredited investors, no advertising
• Rule 506(c) – Unlimited capital, advertising allowed, but only accredited investors allowed

In California, securities laws apply in addition to federal laws. The California Department of Financial Protection and Innovation (DFPI) regulates these offerings, and the state often requires its own notice filings, even if the federal Form D is filed correctly.

3. Who Must File Form D in California?

If you are:

• A California-based company
• A company offering securities to California residents
• Or conducting general solicitation targeting California investors

You are likely subject to California Blue Sky Laws, even if you comply with federal rules.

Companies that file a federal Form D and rely on Rule 506(b) or 506(c) must also submit a notice filing to California DFPI, along with a state-specific fee and a copy of the Form D.

4. �䲹�����ڴǰ��Ծ���’s Notice Filing Requirements

California participates in the National Securities Markets Improvement Act (NSMIA), which means that federally covered offerings (Rule 506) are exempt from state registration, but still require a notice filing in California.

Here’s what’s required:

a. Filing Form D with California DFPI

• File within 15 days of the first sale of securities in California
• Upload a copy of the federal Form D
• Submit Form U-2 (Consent to Service of Process) if not already on file

b. Pay the Required Fee

As of 2024, �䲹�����ڴǰ��Ծ���’s filing fee is $300 per offering.

c. How to File

You can submit through the , which simplifies filings in participating states like California.

Alternatively, California also accepts filings by mail, but online submission is highly recommended.

5. Information Required in Form D

Form D includes the following information, most of which applies equally at the federal and state level:

• Issuer Details: Company name, industry, year founded
• Executive Team: Names and roles of key officers and directors
• Offering Details: Exemption used (e.g., Rule 506(b)), total amount to be raised, amount raised to date
• Investor Data: Number of investors, accreditation status
• Use of Proceeds: How the capital will be deployed (e.g., working capital, salaries, debt repayment)

6. Timing and Deadlines

Federal Deadline:

• File with the SEC within 15 days after the first sale of securities (not when the offering opens, but when the first investor commits funds).

California Deadline:

• File the California notice within 15 business days of the first sale to a California resident.

If you’re unsure whether a specific investor is a California resident (for example, if they use a P.O. box), it’s safer to assume you need to file.

7. What Counts as a “Sale” in California?

California defines a “s������” broadly — it includes any offer or disposition of a security to a California resident, regardless of whether the transaction is completed in the state or not.

Even if your startup is incorporated in Delaware but operates out of San Francisco, you are still subject to California law if your investors are California residents.

8. Accredited Investor Rules in California

California generally follows the SEC’s definition of an accredited investor, which includes:

• Individuals with a net worth over $1 million (excluding primary residence)
• Individuals with income over $200,000 ($300,000 with spouse) for the past two years
• Entities with more than $5 million in assets

Under Rule 506(c), California also requires that the issuer verify accredited status using reasonable steps (e.g., tax returns, W-2s, third-party verification).

9. What Happens If You Don’t File in California?

Failing to file properly with the California DFPI can result in:

• Fines and penalties from the state
• Rescission rights, meaning investors could demand their money back
• Loss of exemption, making your offering illegally unregistered
• Damage to future fundraising efforts

California is one of the strictest states in terms of securities enforcement — compliance is essential.

10. General Solicitation Rules in California

Under Rule 506(c), general solicitation is allowed only if:

• All investors are accredited
• The company verifies accreditation (self-certification is not enough)

California respects this rule but requires proof of verification if audited. If you conduct general solicitation (ads, social media posts, pitch events), ensure you’re compliant on both state and federal levels.

11. California-Specific Forms and Resources

To remain compliant with California law, consider the following:

• Form D (filed federally and with California)
• Form U-2 (Consent to Service of Process)
• NASAA EFD system for filing and paying fees online
• �䲹�����ڴǰ��Ծ���’s Regulatory Guide for Small Businesses (available at dfpi.ca.gov)

12. California vs. Other States

Some states have opted out of EFD or require additional disclosures. California, however:

• Accepts Form D filings via EFD
• Requires the $300 fee
• May request follow-up documentation, especially if the issuer is based in California

If you raise funds from investors in multiple states, you may need to file in each investor’s home state separately, depending on their Blue Sky laws.

13. When to Amend Your Form D

You must amend your Form D both federally and in California if:

• The offering size changes
• The issuer’s address or principal officers change
• You cross certain fundraising thresholds
• The exemption rule you rely on changes

Failure to amend in a timely fashion could void your exemption.

14. Best Practices for Startups in California

To ensure your Form D and California compliance goes smoothly:

• File early — don’t wait for the 15th day
• Use the EFD system for simplicity
• Work with a securities attorney, especially for 506(c) offerings
• Maintain detailed records of investor accreditation
• File Blue Sky notices in every state where you have investors

15. Common Mistakes in California Offerings

Some of the most common errors California startups make when filing Form D:

• Not filing with DFPI (filing only with SEC)
• Paying the wrong fee or submitting it late
• Using general solicitation under Rule 506(c) but failing to verify investors
• Missing the state deadline due to confusion with federal deadlines

Even well-meaning founders get tripped up by these technicalities — don’t go it alone.

16. Do You Need a Lawyer?

While Form D itself is short, the surrounding regulatory landscape is complex, especially in California. Hiring a startup attorney familiar with California and federal securities law is a smart investment.

A lawyer can help you:

• Select the correct exemption
• Prepare and file Form D
• Handle investor disclosures
• File with California DFPI
• Respond to any state follow-ups

Conclusion

Filing Form D is a critical step for startups and private companies raising capital — and in California, it comes with extra responsibilities. With the right knowledge and preparation, startups can raise funds legally while avoiding regulatory headaches.

Whether you’re pitching angel investors in San Francisco, launching a biotech firm in San Diego, or building a fintech app in Los Angeles, compliance with both federal and California law is essential to your success.

If you’re planning a securities offering, file on time, follow the rules, and when in doubt — get legal help. It’s a small cost to protect your startup’s future.

The post Form D California Requirements: 2025 Guide for Startups appeared first on 91���� Business Law Firm.

Table of Contents

• Introduction
• California’s Legal Position on Non-Compete Agreements
• Exceptions to the Rule
• Penalties for Enforcement Attempts
• The Importance of Tailored Non-Solicitation Agreements
• The Role of Trade Secret Law
• Best Practices for Employers
• Protect Trade Secrets Proactively 
• Conclusion

Introduction

The legal landscape regarding non-compete agreements in California presents a unique challenge for employers. 

Known for its employee-friendly laws, California stands out for its stringent stance on such agreements. 

As a business law firm advising employers across the Golden State, 91���� recognizes the importance of staying informed about the intricacies of non-compete clauses. 

This comprehensive guide unpacks the current legal position in California and provides essential pointers for employers seeking to navigate this complex area of employment law.

California’s Legal Position on Non-Compete Agreements

Under California’s Business and Professions Code Section 16600, non-compete agreements are, for the most part, void and unenforceable. 

This section asserts that every individual has the right to engage in a lawful profession, trade, or business of their choice. 

Consequently, agreements that restrain anyone from exercising these professional rights are against California’s public policy.

Exceptions to the Rule

Notwithstanding the general prohibition, there are narrow exceptions where non-compete clauses may hold up in California courts. 

Specifically, there are instances related to the sale of a business or dissolution of a partnership where such agreements can be deemed enforceable. 

These exceptions pertain to:

1- If an employee sells their ownership interest in a business and agrees not to compete, to protect the value of the business or goodwill being sold.

2- When a partner agrees not to compete in anticipation of the dissolution of a partnership or the departure from that partnership.

Penalties for Enforcement Attempts

Employers should be cautious about attempting to enforce non-compete agreements as California law, particularly Senate Bill 699 and Assembly Bill 1076, imposes penalties for doing so.

These statutes state that attempting to enforce a void non-compete clause can result in significant legal repercussions. 

Employers may face fines and could be ordered to pay the legal costs associated with defending against such unenforceable provisions.

The Importance of Tailored Non-Solicitation Agreements

While non-compete agreements are generally off the table, non-solicitation agreements can sometimes be used judiciously in California. 

These agreements must be narrowly tailored and focus on protecting legitimate business interests without preventing someone from earning a living in their chosen field. 

Such interests may include safeguarding trade secrets or proprietary information.

Read Also: Navigating Legal Challenges in AI Startup Funding Rounds

The Role of Trade Secret Law

Trade secret law often intersects with non-compete discussions in California. 

Employers can and should protect their trade secrets by other legal means. 

Confidentiality agreements that prevent the disclosure of trade secret information are both lawful and crucial for guarding intellectual property and can provide a measure of protection in place of a non-compete clause.

Best Practices for Employers

Avoid One-Size-Fits-All Approaches: Employers should refrain from using generic non-compete agreements that are enforceable in other states but are void in California.

Customize Non-Solicitation Agreements: Tailor any non-solicitation clauses carefully to align with California law and ensure they focus on specific legitimate business interests.

Protect Trade Secrets Proactively

Implement robust confidentiality agreements and trade secret policies to protect proprietary information without infringing on employees’ rights.

Stay Informed on Legal Developments: Employment laws are constantly evolving. Employers should keep abreast of the latest developments and rulings to ensure compliance.

Conclusion

In California, the approach to non-compete agreements is clear: they are disfavored and mostly unenforceable, with only limited exceptions. 

Employers who wish to protect their businesses must navigate within the confines of California law, utilizing non-solicitation agreements and trade secret protections instead of traditional non-compete clauses. 

At 91����, we are committed to providing our business clients with informed and cutting-edge legal advice that aligns with California’s employment landscape. 

By staying vigilant and informed, employers can strike the right balance between protecting their business interests and respecting their employees’ rights to work. If you would like a free consultation with one of out business attorneys please don’t hesitate to reach out to us at Hello@sutterlegal.com or 415-341-2888

The post “Warning” California’s Non-Compete Agreements: What Employers Need to Know appeared first on 91���� Business Law Firm.

Table of Contents

• Introduction:
• I – S Corporation:
  • Structure:
  • Taxes:
• II – Limited Liability Company (LLC):
  • Structure:
  • Taxes:
• III – C Corporation:
  • Structure:
  • Taxes:
• Conclusion:

Introduction:

The decision of how to structure your company is paramount. The chosen structure directly impacts your business operations, including decision-making processes, raising capital, and, most importantly, taxation. As a prominent Silicon Valley Law Firm we face these decisions on a daily basis, and we would like to provide you with an in-depth look into three business structures – S Corps, LLCs, and C Corps.

I – S Corporation:

An S Corporation, or S Corp, denotes a specific tax designation granted by the Internal Revenue Service (IRS). This unique structure blends elements of partnerships and corporations, resulting in an appealing combination of limited liability and avoidable double taxation.

Structure:

S Corps functions under several restrictions; foremost, they are capped at 100 shareholders, all of whom must be U.S. citizens or residents. Associated shares are transferrable, but S Corps can only issue a single class of stock. All shareholders must be natural persons, meaning that one cannot hold the shares with another company. Unfortunately, since my private equity and venture capital firms invest through holding companies, they cannot invest in an S Corp.  Decisions are generally overseen by a board of directors elected by shareholders, inspired by traditional corporation structures.

Taxes:

Perhaps the most attractive aspect of an S Corp is its pass-through taxation. Officers and Employees are paid salaries as W2 employees, then, any leftover corporate income is paid the the shareholders pro rata (based on their ownership) as a draw from the corporate account. 

The S corporation tax advantage is the self-employment tax savings. The shareholder-employees must pay their salaries via W2 with withholding for Social Security and Medicare. However, any company profits flow to the shareholders without employment taxes. 

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The advantage of the S Corp over the Self-Employment tax is dramatic. 

While the entity itself pays no federal taxes, income, and losses are passed directly onto the shareholders who then report these on their individual tax returns. This avoids the notorious double taxation often associated with mainstream corporations.

II – Limited Liability Company (LLC):

An LLC is a popular choice for small to medium-sized businesses due to its operational flexibility and salient feature of limited liability protection.

Structure:

An LLC combines the structures of a partnership and a corporation. It is owned by members who may operate the business directly or hire managers for the task. In an LLC’s flexible management structure, there are no restrictions on the number or type of owners, affording greater operational freedom.

Taxes:

Unlike S Corp, an LLC has more flexibility in its federal tax obligations. It can choose to be taxed as a sole proprietorship (for single-member LLC), partnership (for multi-member LLC), or corporation. By default, LLCs are treated as pass-through entities for tax purposes, thus avoiding double taxation. In order to be taxed as a pass-through entity all owners must be U.S. citizens or residents.

III – C Corporation:

C Corporations, or C Corps, are the standard corporation type and are often used by businesses planning substantial growth or public trading.

Structure:

C Corps exist as standalone entities, separate from their founders or shareholders. They can have unlimited shareholders and issue multiple classes of stock, opening opportunities for attracting numerous investors. The decision-making level is bifurcated into shareholders, who elect a board of directors, and the board, who then appoint officers to look after the day-to-day operations.

Taxes:

Having a separate legal identity, C Corps are subjected to corporate income tax. Their profits are taxed once at the corporate level and again at an individual level if distributed as dividends. This phenomenon, known as double taxation, is a unique trait of C Corps.

Conclusion:

Choosing between an S Corp, LLC, or a C Corp can be overwhelming. Each brings a unique blend of characteristics that cater to specific business needs. In making your choice, consider your business’s size, goals, selling shares, various legal obligations, and implications for taxes. By understanding these intricacies, you can make an informed decision to maximize your company’s success.

Welcome to SutterLegal.com, a prominent business law firm in California, where our team of dedicated professionals is always ready to help you navigate complicated business laws, giving your business the strong foundation it deserves. From starting a new business to meeting compliance standards, we can guide you every step of the way.

The post Understanding S Corp, LLC, and C Corp: A Focus on Structure and Taxes appeared first on 91���� Business Law Firm.

Table of Contents

• Introduction
• Step 1: Board Resolution
• Step 2: Notify Shareholders
• Step 3: Notify Creditors
• Step 4: Liquidate Assets and Distribute Proceeds
• Step 5: Settle Debts and Obligations
• Step 6: File Final Tax Returns
• Step 7: Distribute Remaining Assets to Shareholders
• Step 8: Close Business Operations
• Step 9: File Certificate of Dissolution
• Conclusion

Introduction

Embarking on the journey to dissolve a Delaware C Corporation after an asset purchase (M&A) is a crucial step for companies looking to streamline operations or pivot their business model.

While it might seem like a complex process, with careful planning and adherence to legal requirements, and the assistance of a great law firm it can be executed smoothly.

In this guide, we’ll outline the essential steps you need to take to dissolve your Delaware C Corp after acquiring all of the company’s intellectual property (IP) and other assets.

Step 1: Board Resolution

The first step in this process is obtaining approval from the company’s board of directors.

A board resolution should be passed, affirming the decision to dissolve the corporation. This resolution should be documented and kept in the corporate records.

Step 2: Notify Shareholders

After obtaining board approval, you must notify the shareholders of the decision to dissolve the corporation.

This can be done by sending them a notice of the special meeting where the resolution was passed, or through written consent in lieu of a meeting, depending on the company’s bylaws.

Step 3: Notify Creditors

Once the Certificate of Dissolution is filed, it’s crucial to notify all known creditors of the corporation.

This notice should include a deadline for submitting claims against the company.

This step helps ensure that all outstanding debts are addressed before finalizing the dissolution process.

Step 4: Liquidate Assets and Distribute Proceeds

Following notification to creditors, the corporation must liquidate its remaining assets.

This includes selling any tangible assets like equipment or real estate and transferring the proceeds to a designated account. Additionally, any remaining IP rights should be transferred to the acquiring entity, as outlined in the asset purchase agreement.

Step 5: Settle Debts and Obligations

With the proceeds from asset liquidation, settle all outstanding debts, including those identified by creditors who responded to the notice.

It’s essential to ensure that all debts are resolved before proceeding further.

Step 6: File Final Tax Returns

File the final federal, state, and local tax returns for the corporation.

Ensure all tax liabilities are satisfied, and obtain the necessary tax clearance certificates, if applicable.

Step 7: Distribute Remaining Assets to Shareholders

Once all debts are settled, distribute any remaining assets to the shareholders in accordance with their ownership percentages.

This should be done in compliance with tax laws and regulations.

Step 8: Close Business Operations

Conclude any remaining business operations, such as canceling leases, contracts, and any other ongoing commitments.

Notify employees, if applicable, and address any remaining employment-related matters.

Step 9: File Certificate of Dissolution

In Delaware, you’ll need to file a Certificate of Dissolution with the Delaware Secretary of State.

This form will contain essential information about the corporation, such as its name, date of dissolution, and a statement that all corporate debts and obligations have been paid or adequately provided for.

Conclusion

Dissolving a Delaware C Corporation after an asset purchase (M&A) is a structured process that requires meticulous attention to detail and adherence to legal requirements.

By following these steps and seeking professional advice when necessary, you can navigate the dissolution process smoothly, ensuring a seamless transition to the next phase of your business endeavors.

Remember, consulting with legal and financial professionals familiar with Delaware corporate law is crucial to ensure compliance with all legal obligations.

If you have any questions about the process please reach out to our team at 91���� for a free consultation with an experienced and friendly Business Attorney

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Table of Contents

• 1- Founder(s)/CEO
• 2- Management Team/ C-Suite Executives
• 3- Board of Directors
• 4- Employees

Understanding the corporate structure of a startup is imperative to business success.

Deriving a crystal clear definition for the term “Startup Corporate Structure” certainly provides a starting point for this discussion.

At its heart, ‘Startup Corporate Structure’ encompasses the chain of command, responsibilities and rights of different startup members, extending from the founder(s) all the way down to the intern.

Often, unsuspecting startups can be caught up in the breakneck speed of business operations, neglecting the need to develop an organized structure. Such omissions can stall growth, create ambiguity in roles, and even lead to internal conflict – elements detrimental to any budding enterprise.

Therefore, a meticulously designed and executed Startup Corporate Structure can be a game-changer for scalable businesses.

Startups, by their very dynamic nature, progress at a frenetic pace.

To keep up with this speed and to facilitate scalability, a flexible and adaptable corporate structure is essential.

1- Founder(s)/CEO

At the helm, we usually find the founder(s) or CEO. Their role encompasses defining the company’s vision, strategy, and culture – creating a robust bedrock for their venture. They build their team, marshal resources, and take the pivotal decisions that shape the course of the startup.

2- Management Team/ C-Suite Executives

Beneath the founder(s) are the members of the management team. This typically includes positions like the Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Marketing Officer (CMO), etc. Each has a dedicated role. For instance, the CFO manages financial risks while the CMO handles marketing strategies.

3- Board of Directors

The Board for an early-stage startup typically consists of the founder, as the company receives Venture Capital (VC) funding, the VC will insist that they receive a seat on the Board. The right Board Members will bring valuable insights, drawn from their wealth of experience, and can prove invaluable. Selecting members with diverse backgrounds can offer a broad spectrum of perspectives, capturing a holistic view of the industry.

4- Employees

Startup employees are often seen juggling multiple roles and responsibilities. As startups begin to grow and scale, however, it’s advisable to provide employees with specific job roles. This ensures accountability and efficiency within the organization.

The initial phase of a startup often mirrors a flat structure where everyone pitches in wherever needed. While this can foster a sense of ownership and inclusivity, as a startup scales, assigning specialized roles mitigates confusion and maximizes productivity.

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When it comes to designing a Startup Corporate Structure, scalability must not be overlooked.

As a startup grows, it has to deal with an increasing number of tasks which require a higher amount of specialization.

The organizational structure must be able to incorporate these new roles and departments seamlessly without disrupting current operations, hence, a structure that encourages scalability is key.

In conclusion, a well-developed Startup Corporate Structure fosters clarity, aligns the team towards the organization’s vision, and enables efficient decision-making.

Plus, it readies the company for future growth, effectively paving the way for scalability.

So, while passion and idea generation lies at the heart of all startups, it is the systematic structural underpinning that sets a startup on the path to becoming a scalable enterprise.

 If you would like to speak with an experienced Business attorney, please reach out to 91���� for a free consultation.

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Table of Contents

• 1. Introduction.
• 2. Conducting Due Diligence
• 3. Identifying Trademark Assets.
• 4. Drafting and signing the trademark assignment agreement.
• 5. Recordation of the assignment.
• 6. Post-Acquisition considerations.
• 7. Conclusion

1. Introduction.

The goal of any good startup is to generate great intellectual property, when it is time for mergers & acquisitions (M&A), the transfer of intellectual property (IP) assets is a crucial component of any asset purchase agreement. Among these assets, trademarks play a vital role in protecting a company’s brand identity and goodwill. When acquiring a company’s assets through an M&A transaction, it is important to understand how trademarks and trademark applications can be assigned. This blog post will provide an overview/outline of the process of assigning a trademark in an M&A asset purchase agreement.

2. Conducting Due Diligence

Before proceeding with an M&A transaction, it is essential to conduct thorough due diligence on the target company’s intellectual property portfolio, including its trademarks. This process helps the acquiring party:

– identify the target’s trademark assets; confirm the ownership, scope, validity, and enforceability of the trademark assets, as well as their assignability,

– investigate the risk of infringement and third-party claims regarding the target’s trademark assets,

– make sure that no third-party consent is required for the assignment of the trademark assets.

The due diligence process may involve reviewing trademark registrations and applications and examining any existing licenses or agreements related to the trademarks.

3. Identifying Trademark Assets.

During the due diligence process, it is important to identify the specific trademarks assets that will be included in the asset purchase agreement, these could be either registered trademarks (state or federal), pending trademark applications or unregistered trademarks (common law rights in trademarks) of the target company. Additionally, any related intellectual property rights, such as logos, slogans, or trade dress, should also be identified and considered. The acquiring party needs to make sure that if the trademarks include any logos or designs, the target company owns all rights in such logos and designs. It is important to note that not all trademark assets can be assigned, certain trademark applications, such the intent-to-use applications, cannot be assigned before the marks are fully registered.

4. Drafting and signing the trademark assignment agreement.

In an asset purchase transaction, besides the asset purchase agreement, the parties also need to execute a trademark assignment agreement as an ancillary document. The agreement should explicitly state which registered trademarks and trademark applications are being assigned to the acquiring party. It should also include certain provisions regarding the transfer of the title and interest in the trademark assets. The assignment is considered completed when both the asset purchase agreement and the trademark assignment agreement have been finalized and executed.

5. Recordation of the assignment.

Under US law once executed, the trademark assignment agreement can be recorded with the . Recordation is not mandatory; however, it is highly recommended. It protects the byer’s interest by:

– creating public evidence of the buyer’s ownership rights,

– provides constructive notice to third parties about the assignment, and

– priority against subsequent bona fide purchasers of the trademark assets without notice.

6. Post-Acquisition considerations.

Following the completion of the M&A transaction and the assignment of the trademark assets, the acquiring party should develop a post-acquisition trademark strategy to protect its trademark assets. This strategy should involve trademark maintenance and renewal of the trademark registrations, monitoring and identifying similar or infringing trademarks and/or applications, as well as trademark enforcement against potential infringers.

7. Conclusion

Assigning a trademark as part of an M&A asset purchase transaction is a complex process that requires careful consideration and legal expertise. Conducting due diligence, identifying trademark assets, drafting a comprehensive asset purchase agreement and a trademark assignment agreement, and properly executing those agreements are critical steps to ensure a successful transfer of ownership. By following these steps and implementing a post-acquisition trademark strategy, the acquiring party can protect and leverage the acquired trademarks to enhance its brand presence and business objectives. If you would like to speak with an experienced M&A attorney or trademark attorney, please reach out to 91���� for a free consultation.

The post Assignment of trademark rights as part of an M&A Asset Purchase appeared first on 91���� Business Law Firm.

Table of Contents

• Understanding the U.S. Legal System
• Choosing a Business Entity
• Obtaining Necessary Licenses and Permits
• Complying with Employment Law
• Navigating Tax Law
• Protecting Intellectual Property
• Conclusion

The United States is a land of opportunity for international startups from around the world.

With a large market, a stable economy, and a favorable business environment, the country offers many advantages to those looking to start a business or expand their operations.

However, for international startups, navigating the complexities of U.S. business law can be a significant challenge.

In this guide, we’ll provide an overview of the legal landscape in the U.S. and offer tips for international startup founders looking to succeed in this market.

Understanding the U.S. Legal System

The U.S. legal system is complex and can be challenging for outsiders to understand.

The system is based on common law, which means that judges rely on previous court decisions to make their rulings.

This can make the law difficult to interpret and follow, as there is often no single, definitive answer to a legal question.

In addition to the common law system, the U.S. also has a federal system of government, which means that there are both federal and state laws that govern business activities.

Federal laws are created by Congress and apply to the entire country, while state laws vary from state to state.

Some of the key federal laws that international founders should be aware of include the Foreign Corrupt Practices Act (FCPA), which prohibits bribes and other corrupt payments to foreign officials, and the Securities Act of 1933, which regulates the sale of securities in the U.S. State laws can also be important, particularly in areas such as employment law, tax law, and environmental law.

Choosing a Business Entity

One of the first decisions that international startup founders must make when starting a business in the U.S. is choosing a business entity. There are several options available, each with its own advantages and disadvantages.

One of the most popular business entities is the limited liability company (LLC), which offers liability protection for the owners while also allowing for flexible management and tax treatment. However, if you are not us taxpayer, you will automatically be converted to a C corporation by the IRS.  Another option is the corporation, which provides the strongest liability protection but can be more complex to set up and maintain.

If you are seeking investment, and to build a Silicon Valley startup, you will need a Delaware C corporation. 

It’s important to consult with an attorney and a tax advisor when choosing a business entity, as the decision can have significant legal and financial implications.

Obtaining Necessary Licenses and Permits

In order to conduct business in the U.S., international startup founders may need to obtain certain licenses and permits.

The requirements can vary depending on the type of business and the location, so it’s important to research the regulations in advance.

Some common licenses and permits that may be required include a business license, a sales tax permit, and an employer identification number (EIN).

Obtaining an EIN can be very complex for an international startup founder if they do not have a US Social Security Number (SSN). Without an SSN you will need to wait weeks, if not months to obtain your EIN. 

Complying with Employment Law

Employment law is another area that international startup founders must navigate carefully when doing business in the U.S. The U.S. has numerous federal and state laws that govern the employer-employee relationship, including laws related to minimum wage, overtime, discrimination, and harassment.

International startup founders should be aware of the specific laws that apply to their businesses and take steps to comply with them.

This may include developing an employee handbook, providing training to managers and employees, and consulting with an employment law attorney.

Navigating Tax Law

Tax law is another area that can be complex for international startup founders.

The U.S. tax system is based on a self-assessment model, which means that businesses are responsible for determining their own tax liability and filing tax returns accordingly.

International startup founders may also be subject to additional taxes, such as withholding taxes on payments made to foreign employees or contractors.

It’s important to work with a tax attorney to ensure compliance with U.S. tax laws and to take advantage of any available tax incentives or exemptions.

Protecting Intellectual Property

Intellectual property (IP) is a critical asset for many businesses, particularly those in technology or creative industries.

In the U.S., there are several types of IP protection available, including patents, trademarks, and copyrights.

International startup founders should take steps to protect their IP when doing business in the U.S. This may include filing for patents or trademarks with the U.S. Patent and Trademark Office, registering copyrights with the U.S. Copyright Office, and including IP protection provisions in contracts and agreements.

Without proper IP protection, you cannot receive Venture Capital Investment, cannot go IP, and will not be acquired through Merger or Acquisition. 

Conclusion

Navigating the complexities of U.S. business law can be a challenge for international startup founders. However, with careful planning, research, and the assistance of legal and financial advisors, it is possible to succeed in this market. By understanding the legal landscape, choosing the right business entity, obtaining necessary licenses and permits, complying with employment and tax laws, and protecting intellectual property, international startup founders can position themselves for long-term success in the U.S. market.

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Table of Contents

• Convertible Note
• Convertible Notes terms
• SAFE Note
• SAFE Note VS. Convertible Notes

This article introduces Convertible notes and SAFE notes and explains the differences between them.

Founders have two primary options for receiving seed investments into their Startups: Convertible Notes and SAFE notes.

Convertible Note

A Convertible Note is a type of debt instrument that has the right to convert into equity when certain milestones are hit.

This type of debt automatically converts into shares of preferred stock upon the closing of equity financing (when a startup sells shares of stock at a fixed price) Series A round of financing for example.

Convertible Notes typically include complex terms and triggers so it is prudent to hire a San Francisco or Silicon Valley attorney to help you understand the terms of Convertible Notes.

Convertible Notes terms

Convertible Notes typically trigger and convert when a “qualifying transaction takes place” (in accordance with the terms of the note purchasing agreement) or when both parties agree on the conversion.

As a legal requirement Convertible Notes include a maturity date, or the date the loan must be repaid, or extended if it has not been converted. If the next round of financing does not occur before the maturity date of a Convertible Note, the startup will have to either pay back the principal and interest of the loan in full, convert the debt into equity, or request an extension on the maturity date. ‌ 

SAFE Note

Alternatively, founders may issue SAFE “Simple Agreement for Future Equity.”

A well-known Silicon Valley technology accelerator created SAFE, so Silicon Valley investors are likely to be comfortable with them.  SAFEs were created to simplify seed investments. In essence, a SAFE is a futures agreement to purchase stock in a future priced round.

Unlike convertible notes, SAFEs do not carry an interest rate and have no maturity date. SAFE convert into the next round of preferred stock that the company issues in the subsequent priced financing round.

SAFES convert when a priced round produces any amount of equity financing.  

SAFE Note VS. Convertible Notes

Both SAFE and Convertible Notes allow for conversion into equity. The key difference is that while a Convertible Note can allow for the conversion into the current round of stock or a future financing event, a SAFE only allows for a conversion in the next round of financing or during a Merger or Acquisition.

A SAFE can convert when you raise any amount of equity investment. However, raising common stock does not trigger a conversion for a SAFE investor.

Convertible Notes and SAFEs offer similar payout mechanisms in the event of a change in control before a conversion can occur.

Both Convertible Notes and SAFEs include complex terms and triggers that can be perplexing for founders.

This can lead to existential problems for a startup like the dilution of shares.

The experienced attorneys at 91���� will help you understand the terms of SAFEs and Convertible Notes and avoid future problems. If you would like a consultation with an experienced business attorney please contact us.

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Table of Contents

• What is a Form D?
• The purpose of Form D
• Why do I need a Form D?
• Form D details
• Form D is a requirement

Form D is a form used by startups to raise capital while remaining compliant with securities laws.

The SEC filing form is used to file a notice of an exempt offering of securities under Regulation D of the U.S. Securities and Exchange Commission.

The Commission’s rules require the notice to be filed by companies and funds that have sold securities without registration under the Securities Act of 1933 in an offering based on a claim of exemption under Rules 504 or 506 of Regulation D or Section 4(6) of that statute.  

What is a Form D?

A Form D is a notice of an exempt offering of securities. It is a document that must be filed with the SEC by companies that are offering securities for sale under Regulation D of the Securities Act of 1933.

 Regulation D provides exemptions from the registration requirements of the Securities Act for certain private placements of securities.

The purpose of Form D

is to provide the SEC and investors with information about the offering, including the type of securities being offered, the number of securities being offered, and the number of investors who have purchased the securities.

The information in Form D is used by the SEC to monitor private placements of securities and to detect fraud or other violations of securities laws.

Why do I need a Form D?

If your company is offering securities for sale, you need to file a Form D with the SEC.

Failure to file a Form D can result in fines, penalties, and legal action by the SEC.

1. Compliance with securities laws: Filing a Form D is required by law for companies that are offering securities for sale. By filing a Form D, you are complying with the securities laws and avoiding potential legal issues.
2. Protection against fraud: The information in Form D is used by the SEC to monitor private placements of securities and to detect fraud or other violations of securities laws. By filing a Form D, you are providing investors with transparency and protecting them from potential fraud.
3. Access to capital: Filing a Form D can help you raise capital for your business. By offering securities for sale under Regulation D, you can raise capital from accredited investors without the need for a public offering.
4. Reputation: Filing a Form D can help to establish your company’s reputation as a legitimate business. By complying with securities laws and providing transparency to investors, you are demonstrating your commitment to ethical business practices.

Form D details

basic information about a company for investors in the new issuance. The information may include the size and date of the offering, along with the names and addresses of a company’s executive officers.

This notice is an alternative to more traditional, lengthy reports when filing a non-exempt issuance. Companies that sell securities typically have to register with the Securities and Exchange Commission (SEC) under the Securities Act of 1933.

This is a long process and can make it complicated to follow and understand the law. Startups seeking capital can instead file a Form D  which is a quicker and simpler process that protects the company from potential legal problems pertaining to new issuance.

Read Also: Form D California Requirements: 2025 Guide for Startups

Form D is a requirement

under Regulation D, which governs private placements of securities.

A private placement is a capital-raising event that involves the sale of securities to a relatively small number of select investors.

These investors are often accredited and can include venture capital firms, large banks, mutual funds, insurance companies, pension funds, family offices, hedge funds, and high and ultra-high-net-worth individuals.

Accredited investors usually earn over $200,000 a year or have a net worth of at least $1 million.

These investors typically have significant resources and experience, so disclosure requirements for a private placement are often minimal.

By either registering with the SEC or filing a Form D, a business has complied with securities laws pertaining to a capital-raising event. 

1. Timeliness: Form D must be filed with the SEC no later than 15 calendar days after the first sale of securities in the offering. If the first sale of securities occurs before the filing of Form D, the offering may no longer be exempt from registration, and the company may be subject to penalties and legal action.
2. Completeness: Form D must be complete and accurate. The information provided in Form D must be consistent with the information provided in other documents related to the offering.
3. Information Required: Form D requires information about the company, the securities being offered, and the offering itself. The following information is required on Form D:

• Name and address of the company
• Type of organization (e.g., corporation, limited liability company)
• State or country of incorporation
• Name and address of the company’s executive officers and directors
• Description of the securities being offered
• The total amount of securities being offered
• An exemption is claimed under Regulation D
• Use of proceeds from the offering
• Number of investors who have already purchased securities in the offering
• Date of the first sale in the offering

4. Filing Fees: The SEC charges a filing fee for each Form D submitted. The fee must be paid at the time of filing and is based on the total amount of securities being offered.
5. Amendments and Withdrawals: If there are material changes to the information provided in Form D, an amendment must be filed with the SEC. If the offering is canceled or terminated, a notice of withdrawal must be filed with the SEC.

Form D must be filed no later than 15 days after the first sale of securities, and must be filed annually if the offering reported on the original Form D is continuing on the anniversary date of the previous filing. Late filing penalties can be assessed, which vary from state to state.

If you are looking to issue securities to raise capital for your startup, please contact the experienced attorneys at 91���� today. We want to help you build the next big company!

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Table of Contents

• What is Series A Financing?
• Needs for Series A Financing
• Action for Series A Financing
• Benefits of Series A Financing
• Challenges of Series A Financing
• How to Secure Series A Financing?
• Need Help?

Series A financing is a level of investment in a startup subsequent to initial seed capital, normally drawing investments in the millions if not tens of millions of dollars.

A startup will generally attract this financing level only after it has demonstrated a viable business model with robust growth potential.

Series A investments are typically used to catalyze additional growth in startups; especially in the areas of hiring, product research, and development, advertising, increasing inventory or equipment, and other long-term goals.

What is Series A Financing?

Series A financing is a type of equity financing that is used to raise capital for early-stage startups.

It is usually the first institutional round of funding, after a seed round, and is typically used to help startups scale their operations, expand their team, and invest in research and development.

In exchange for funding, investors receive shares in the company, which gives them an ownership stake.

The valuation of the company is established during the Series A financing round, which can range from several million dollars to tens of millions of dollars, depending on the startup’s potential and the investor’s confidence in its growth prospects.

Needs for Series A Financing

When startups raise additional capital through Series A financing, they will typically do so in exchange for a significant share of equity in the company.

As a result, the startup may need to amend its articles of incorporation in order to create additional shares to allocate to Series A investors.

The new shares issued to Series A investors are typically in the form of Preferred Stock.

Since the stock received in exchange for the investment is frequently Preferred Stock which will convert to Common Stock upon a future financing, merger, or Initial Public Offering; there will also need to be an equal amount of corresponding Common Stock available in proportion to the amount of issued and outstanding Series A Preferred Stock.

Action for Series A Financing

So, the company may need to amend the articles of incorporation to create both a sufficient number of Preferred and Common Shares that will be available upon the future conversion of the Series A Preferred Shares.

To determine how many additional shares must be created, if any, the startup will need to consult a highly detail-oriented corporate attorney.

This attorney will formulate a Pro Forma Cap Table that accounts for the Series A investment(s). This is some of the most complex and detail-intensive work that attorneys can partake in, so, it is especially important to be selective about the counsel that you choose.

Benefits of Series A Financing

1. Growth Opportunities: Series A financing provides startups with the capital they need to grow and scale their operations. This can enable startups to expand their team, develop new products and services, and enter new markets.
2. Attracting Talent: Series A financing can help startups attract top talent by providing them with the resources they need to grow their team and offer competitive compensation packages.
3. Validation: The fact that a startup has secured Series A financing can serve as a validation of its potential and growth prospects, which can attract additional investors and customers.

Challenges of Series A Financing

1. High Expectations: With Series A financing, investors are typically looking for a significant return on their investment. This can put pressure on startups to achieve rapid growth and profitability.
2. Dilution: Series A financing involves giving up a portion of the company’s ownership in exchange for funding, which can dilute the founding team’s ownership stake.
3. Competition: Series A financing is highly competitive, with many startups vying for the attention of investors. This can make it difficult for startups to stand out and secure funding.

How to Secure Series A Financing?

1. Develop a Strong Business Plan: A strong business plan is essential for securing Series A financing. This should include a clear description of your market opportunity, a detailed analysis of your target market, and a solid growth strategy.
2. Build a Strong Team: Investors are looking for startups that have a strong team with a track record of success. You should focus on building a team with the skills and experience necessary to execute your business plan.
3. Demonstrate Traction: Investors want to see that your startup has traction and is gaining momentum. This can include metrics such as revenue growth, customer acquisition, and user engagement.
4. Network with Investors: Networking with investors can help you build relationships and gain access to funding opportunities. You can attend industry events, join , and seek out introductions from other entrepreneurs and investors.

Need Help?

The sophisticated attorneys at 91���� are experienced with Series A financings, drafting Pro Formas, and amending articles of incorporation, if necessary. Contact 91���� today so that we can answer your questions regarding your Series A financing and alleviate any concerns you might have.

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