Brian Arnett Lebrecht’s Answers

Brian Arnett Lebrecht

Salt Lake City Securities Offerings Lawyer.

Contributor Level 7
  1. Do VCs prefer close corporations or stock corporations?

    Answered about 2 years ago.

    1. Brian Arnett Lebrecht
    2. Shawn Regis Jackson
    3. Roman Tabatchouk
    4. Charles R Smith
    4 lawyer answers

    A statutory close corporation (which is what you are refering to as a closely held corporation) is not going to be the structure of choice for VC's. VC's will likely require a shareholders (or buy/sell) agreement that trumps most of the statutory simplicity of a close corporation. Having said that, it is relatively simple to change away from a statutory close corporation by filing an amendment to your articles of incorporation at the time of a VC investment.

    4 lawyers agreed with this answer

    1 person marked this answer as helpful

  2. If a California corporation only has two owners do they both have to be listed in the Statement of Information?

    Answered almost 2 years ago.

    1. Phillip Monroe Smith
    2. Bryant Keith Martin
    3. Bruce Allan Wilson
    4. Brian Arnett Lebrecht
    4 lawyer answers

    No, in fact neither owner has to be listed on the Statement of Information simply by virtue of the fact that they are owners. Officers and directors, who may or may not be owners, are listed.

    2 lawyers agreed with this answer

  3. We have a start up that was incorporated in DE - we recently issued shares of the corporation, do we need to give notice to DE?

    Answered about 2 years ago.

    1. Dana Howard Shultz
    2. Michael Charles Doland
    3. Brian Arnett Lebrecht
    4. Mark Joseph Guay
    4 lawyer answers

    Not to Delaware, until it is time to calculate your annual franchise tax, which may be based, in part, on the number of shares outstanding. But that only comes up once a year. However, you may need to notify the SEC (federal) and the state in which the shareholder resides, depending on which securities exemption you are able to rely upon (presuming you are able to rely on an exemption, which you most likely are).

    2 lawyers agreed with this answer

  4. Any way to register foreign corporation in TX after 2 years of operating in TX without paying penalties to TX Sec. of State?

    Answered about 2 years ago.

    1. Orsen E. Paxton III
    2. Brian Arnett Lebrecht
    2 lawyer answers

    I agree with my colleague in that you need to involve both the litigation attorney, and local Texas corporate counsel. When moving a corporation from one state to another, I usually form a new corporation in the new state, and then do a merger of the old corp into the new corp. This maintains continuity of the corporate entity (rather than sever the old and start the new one from scratch), and may be a way to work around the penalties you describe. I don't know enough facts to actually...

    Selected as best answer

  5. Spining off a product from my C corp to form a new software co. How to best structure this?

    Answered about 2 years ago.

    1. Massimo Paternoster
    2. Brian Arnett Lebrecht
    3. Dana Whitney Atchley
    3 lawyer answers

    There are other considerations besides tax, although you need to understand the tax implications fully so you can make an informed decision. Other considerations include how to limit liability to you and the other (transferring) corporation, and if you are going to seek outside investors, what will be attractive to them. This sounds to me like a transaction where a little money spent on a trusted lawyer will go a long way toward avoiding pitfalls later.

    3 lawyers agreed with this answer

  6. Costs and fees for setting up a Delaware C corp

    Answered about 2 years ago.

    1. Bryant Keith Martin
    2. Michael Charles Doland
    3. Brian Arnett Lebrecht
    4. Robert V Cornish Jr.
    5. Ray Beckerman
    5 lawyer answers

    As you can see from the other answers, you're probably asking the wrong question. Forming a corporation is a no-brainer, you can do that with any number of online services for a nominal charge. The question you should be asking is, what type of guidance do I need in addition to the formation of a corporation? Such as c-corp vs. s-corp, state of incorporation, capital structure, introductions and guidance on taking investors, securities law issues, etc. I think all the answers have been...

    1 lawyer agreed with this answer

  7. If corporations in Delaware are not required to pay income tax, does that mean they only pay tax in the state of operation?

    Answered almost 2 years ago.

    1. Robert A. Stumpf
    2. Phillip Monroe Smith
    3. Brian Arnett Lebrecht
    4. Sebastien Gaddini
    4 lawyer answers

    Some states without an income tax, instead have a franchise tax. For your purposes, either way, its a tax. Delaware's franchise tax can be quite large, depending on your capital structure, and then on top of that you will have an income/franchise tax in the state(s) in which you do business.

    2 lawyers agreed with this answer

  8. How does personal bankruptcy affect a minority shareholder in a subchapter s corp

    Answered about 2 years ago.

    1. Stuart M Nachbar
    2. Peter Walter Weston
    3. Brian Arnett Lebrecht
    4. Charles R Smith
    4 lawyer answers

    I believe this could potentially have a huge effect. If the minority shareholders stock goes into the bankruptcy estate, the Trustee has an obligation to get top value for it, even if that means selling to an outside party. The 3 remaining siblings don't want a strange as their 4th owner. This is why a good shareholders agreement or buy/sell agreement should always be in place, because such an agreement could trigger one or more mandatory transactions upon the minority shareholder filing for...

    2 lawyers agreed with this answer

  9. Do I need to change my business entity if I want to sell the business?

    Answered about 2 years ago.

    1. Ray Beckerman
    2. Phillip Monroe Smith
    3. Brian Arnett Lebrecht
    3 lawyer answers

    The answer is...maybe. There are important tax and liability considerations that might make it advisable to change your business entity. But the factors that go into that decision are too specific for a Q&A board such as this.

    2 lawyers agreed with this answer

  10. Sell a s corporation in California

    Answered almost 5 years ago.

    1. Brian Arnett Lebrecht
    2. Mark L Rosenberg
    2 lawyer answers

    Assuming you have a buyer, the simplest structure is a sale of your stock to the buyer. In this way, the buyer gets complete ownership of the corporation, including all of its assets, liabilities, etc. Having said that, depending on the nature of the business, the buyer may not want to buy the corporation, but instead may want to buy the assets of the corporation, thus avoiding the purchase of its liabilities. There are risks and tax consequences to each structure, so you should seek...