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San Diego Business Organizations Law Blog

Hobby Lobby ruling sparks debate on integrity of corporate veil

The recent Hobby Lobby ruling by SCOTUS has sparked debate throughout the country. One of the more concerning questions that the ruling has led to for business owners is whether or not the ruling weakens the strength of the corporate veil.

The corporate veil is a legal term that refers to the protection offered by incorporating a business. Essentially, moving forward with an LLC or other business designation allows an entrepreneur to operate his business without fear of putting personal assets at risk in the event of a lawsuit. In theory, if a creditor were to file a suit against the business the suit would attack the business assets only, not reach through to the owner's or shareholder's assets.

What is an S corporation?

When business owners are just starting out, they might take time to consider what type of business structure to operate under. Every business has different needs, so choosing which route to take can be tailored to best suit the business's needs in the present and future.

Over time, however, businesses grow and their needs change, so restructuring might be a beneficial move. When looking through all of the options during business formation or reorganization, it's natural to wonder what distinguishes each structure.

In this post, we will discuss the unique characteristics of S corporations, one of many potential business structures. Business owners might wonder how this structure is any different from a traditional corporation, or C corp.

Operating a business while dealing with obstacles

One of the most talked about issues the last few years has been the legalization of marijuana for medicinal or recreational purposes. California is one of the states that allows the sale of the drug for medical purposes.

This, of course, isn't an attempt to jump into the debate over this issue; rather, this post will use a current event to frame some considerations that business owners should make when they open doors for business and while they are in the midst of operating.

According to the LA Times, California law currently allows marijuana dispensaries to sell products to customers who have formed a collective. More recently, however, a voter-approved measure gave the state more latitude to close dispensaries that didn't meet the letter of the law.

Cell phone carrier merger could be complicated by suit from feds

Businesses are always looking for ways to gain a competitive advantage. There are many means by which companies can distinguish themselves, and proceeding with a strategic merger is one of them.

As companies look to others in their industry or companies in a related field, they might see an opportunity to join forces and emerge as a stronger, unified company. Merging two companies isn't necessarily a simple process, but there are some factors that can cause a major disruption. Of course, businesses will want to find ways to avoid any unnecessary hurdles.

Patents: Friend or foe of business innovation?

The state of California is full of creative minds. Residents are constantly coming up with novel business and product ideas. However, in order to bring these ideas to life and into the market, entrepreneurs need financial incentive to do so. Not only that, but developing a new business idea often requires significant amounts of capital, so investors also need incentive to put their money on the line.

Enter: the patent. When an entrepreneur has a product that is considered fresh and new, he or she might apply for a patent. If it is granted, the applicant will have exclusive rights to this idea. As such, the patent owner and associated investors can control and profit from the innovation.

San Diego measure highlights importance of land-use ordinances

In order to open or expand a business, owners probably have to go through the process of gaining access to the property necessary to do so. While taking the time to find the "perfect" spot for a business to operate, there may be some legal hurdles to jump.

Not long ago, voters in San Diego weighed in on a major city planning measure. Ultimately, a proposal to control development in the Barrio Logan community was rejected at the ballot box. Of course, this post isn't intended to weigh in on the controversial measure, but it seeks to explore an important issue for existing and aspiring business owners.

What does it take to start a business in California?

One of the great things about California is the state's tremendous entrepreneurial spirit. For many years, the Golden State has been viewed as a hub for creative business minds. Even though a person might have a solid business idea, putting the rubber to the road might present a number of complications or questions.

Of course, in order to open the doors of opportunity aspiring business owners should lay the groundwork for success. After all, unnecessary hurdles are the last thing a young business needs to deal with.

California law limits enforceability of non-compete agreements

Companies work hard to build a unique product and bring it to market. This, of course, can help an entity gain an edge over competitors. Behind the scenes, today's employment market is fluid. The very people who help a company build its unique brand and products may feel compelled to move between several employers over the course of their careers.

Movement in the employment market is obviously a concern for businesses. After all, a company doesn't want privileged information or clients to be brought into the fold of another company. At the same time, businesses can also benefit from the ability to hire fresh talent.

Businesses are seeing arbitration as an alternative to litigation

Many business owners do their best to sell quality products or services in an honest, forthright fashion. Although this may be true, there is always potential for legal claims to come forward against a company for any number of reasons. Litigating a business dispute in the courtroom can turn into a very costly venture and may not result in the fairest of outcomes.

As an alternative to drawn-out litigation, businesses may see value in pursuing arbitration or mediation. This way, the concerns can still be addressed effectively, but without the acrimony.

Why the Supreme Court's abstract patent case matters

According to The New York Times, the U.S. Patent and Trademark Office has received a more than triple increase in patent applications over the past 20 years. However, this flood of patent applications does not necessarily reflect a mirrored increase in tangible innovations. An increase in certain kinds of business litigation over this time period and an investigation by the Government Accountability Office indicate that many of these patents are filed for abstract, overly broad and vague ideas.

Patent protections allow individuals and businesses to monopolize a particular creation or form of intellectual property for a certain period of time and subject to certain restrictions. Therefore, patents are incredibly valuable to those that hold them. In addition, patents allow those that hold them to sue alleged infringers of these rights for damages.

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