A common question we receive when working with limited liability companies taxed as partnerships under Subchapter K of the federal income tax law (“LLCs”) is, can the company grant stock options to its employees and independent contractors, even though the company isn’t a state law corporation (and is in fact taxed as a partnership underContinue reading “Profits Interests in a Limited Liability Company – What Are They?”
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CARES Act: The Affiliation Rules and How They Could Affect Your Eligibility for a PPP Loan
We wrote about the Paycheck Protection Program (“PPP”) component of the CARES Act (“Act”) last week and how it expanded who is eligible for Small Business Administration (“SBA”) loans in response to the COVID-19 pandemic. One of its general qualifications is that the company must have no more than 500 employees. One issue we areContinue reading “CARES Act: The Affiliation Rules and How They Could Affect Your Eligibility for a PPP Loan”
Update to Statutory Preemptive Rights in Washington Corporations
Joe and I wrote a post last year about how to form a Washington corporation, and the importance of doing away with statutory preemptive rights held by shareholders. If a company did not to do this, all of its shareholders would automatically have the opportunity to participate pro rata in a subsequent issuance of anyContinue reading “Update to Statutory Preemptive Rights in Washington Corporations”
CARES Act: How the Paycheck Protection Program Can Help Your Company
Congress has passed and President Trump signed into law on March 27 the Phase 3 COVID-19 Relief package commonly known as the “CARES ACT” in an attempt to provide financial relief to American businesses and the American people in response to the COVID-19 pandemic and specifically include relief to small businesses through up to $349Continue reading “CARES Act: How the Paycheck Protection Program Can Help Your Company”
SEC Concept Release Letter
The SEC recently solicited the public’s views on its regulations on private offerings, issuing the Concept Release on Harmonization of Securities Offering on June 18, 2019. Our group worked hard to write a fifteen page response letter to the Commission containing our suggestions and overall thoughts. See below! Comments to SEC Concept Release Re FileContinue reading “SEC Concept Release Letter”
Appeals Court Rules Seattle Income Tax Unconstitutional
In a decision issued on July 15, 2019, Division I of the Court of Appeals of Washington ruled that the 2017 City of Seattle 2.25% tax on high-income residents was unconstitutional because it violated the Washington state constitution’s uniformity requirement (Art. VII, Sect. 1). In striking down the tax, the court relied on a seriesContinue reading “Appeals Court Rules Seattle Income Tax Unconstitutional”
The Rule 701 Math: How to do it
If you are a non-public company granting stock options or other compensatory equity awards, you need to be familiar with Rule 701 Math and in particular its mathematical limitations. Fortunately, they are pretty simple. Unfortunately, many entrepreneurs overlook them with sometimes disastrous consequences. To save you some time, we wrote you a step-by-step guide toContinue reading “The Rule 701 Math: How to do it”
Repricing Stock Options: The Rule 701 Math
By: James Graves and Joe Wallin There may be times during the life of your company in which you will want to reprice underwater stock options. Depending on your cap table, however, this may not be as easy as you think. As you know, Rule 701 sets forth mathematical limitations you must follow when issuingContinue reading “Repricing Stock Options: The Rule 701 Math”
IP Assignments & Confidentiality Agreements
My colleague Susan Schalla and I put together the below video chat on IP assignments and confidentiality agreements for Founders Live. If you haven’t checked out Founders Live, check it out at https://founderslive.mn.co/. Carney Badley Spellman is about Advocacy, Strategy, Results. Located in Seattle, we are a full-service law firm committed to exceptional client service and professionalContinue reading “IP Assignments & Confidentiality Agreements”
SEC Guidance on Crypto
If you are interested in how the SEC is thinking about crypto tokens as securities, we recommend you watch William Hinman’s recent speech and read its transcript. We’ve included an embed and a link to the speech below. We think perhaps the most important and interesting part was this: But this also points the wayContinue reading “SEC Guidance on Crypto”