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Kenneth Allyn Sprang

Kenneth Sprang’s Answers

783 total

  • Is a confidential agreement/NDA with a developer overseas enforceable?

    hello I'm based in US. trying to figure out how to keep my trade secrets confidential while working with a content developer in India. I wanna prevent him from contacting my contacts in the US, using my name on his portfolio, etc. I'd apprecia...

    Kenneth’s Answer

    You cannot guarantee enforceability even in the U.S. If someone breaches the NDA typically you must litigate to enforce it. The same would be true in NDA. What you might do is to provide for international arbitration through the AAA or another organization in some neutral location, e.g., the UK. The agreement should shift all costs of litigation to the other party if the NDA is breached. Reach out then to an Indian lawyer to determine whether there is any provision of Indian law which would strengthen enforceability. You certainly want to avoid any arbitration or litigation there, so the question is whether you could effectively litigate and shift costs to the defendant in India, to compel the defendant to arbitrate or the like and to do so in the forum identified in the Agreement. In short, in addition to the protective language of the NDA, you need to build in the best possible mechanism for enforcement in that NDA and there an Indian lawyer or one of the many Indian lawyers who also practice in the U.S. could be helpful.

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  • I need some help to get legal working status for a foreign consultant and co-trainer for my permanent makeup school.

    I need to hire a foreign consultant to work with me on permanent makeup training in the USA. I am holding training for my very successful permanent makeup school. I have found the co-trainer that I want to hire. Her ability and mastery of the w...

    Kenneth’s Answer

    You probably will want to obtain for her a an H1-B visa. That allows her to work for the company sponsoring her and only that company. There is a limit on the number of such visas granted annually, but I suggest you contact the U.S. Citizenship and Immigration Services

    You will ultimately need an immigration lawyer to help. Most of them charge a fixed fee for the work, so you may wish to shop around a bit. Make sure you get someone with experience though. My partner does a lot of H1B work for employers and we had a young associate who really made some serious mistakes, so you should get good guidance through the process. Good luck.

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  • We need help!!! How can we make this go away with the least amount of effort. We cant afford to go to court

    had a start up tax business with 3 partners on Jan 1. 2015. we had a mutual agreement that none of us would take any draws this year as we needed to cover overhead/rent through the remainder of the year. We ended tax season being debt free and eno...

    Kenneth’s Answer

    Distributions from the company can only be made pursuant to its operating agreement or in the absence of an agreement, pursuant to state law. Your fellow member of the LLC had no right to help herself unilaterally. Any distribution to any member would usually require an affirmative vote of all members.

    You could certainly sue her for breach of her duty to the LLC, essentially converting LLC funds for her own benefit. If she has sued you, you should certainly counterclaim for those funds on behalf of the LLC.

    Her breach of contract suit likely has little vitality, in that her own action was arguably a breach. A big factor is whether you have a definitive operating agreement which would address the rights and privileges of members.

    If you are in litigation you will need counsel. I urge you to find a business attorney who litigates. This is not complex litigation but your counsel needs to really understand the ins and outs of LLCs.

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  • As an Iowa Limited Liability Partnership engaged in publishing books, does require liability insurance for selling books in US.

    As an Iowa Limited Liability Partnership engaged in publishing books, does any state/federal law require to carry liability insurance for selling books in the US? We plan to market to customers all over the US, but we don't have physical presenc...

    Kenneth’s Answer

    The question is not where you are based, but rather to what liability are you exposed. Theoretically, if you sell a few books in a particular state, that state might not have jurisdiction over your company. However, someone could sue you in Iowa for acts occurring in another state.

    The bigger question is what is your exposure. What kinds of liability might you incur other than a product dispute, e.g., someone orders books and is dissatisfied. Check with your insurer locally--someone who does commercial insurance. You should be able to obtain insurance from a commercial carrier insuring you against reasonable and foreseeable risks no matter where the books are shipped.

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  • Can we do business internationally on business type LLC ?

    For trading business especially with middle east side ! Can we do the business legally under LLC TYPE ? Business would be import or export or trading of good from usa to dubai or saudia

    Kenneth’s Answer

    I am a business attorney and this issue comes up a lot. Whether you use an LLC or some type of corporation depends in part on who owns the U.S. company. There are various factors that go into the decision as to whether to use an LLC or something else. You can, of course, opt on the LLC.

    You can generally do business in the Arab countries you mention. I have a few Tunisian clients doing business here. The regulations you face depend on the product or service you will provide.

    Taxation is always another key factor to use in your assessment. Here again, taxation is tied in part to who owns the company and the form in which it is structured.

    I would be happy to discuss without obligation if you like.

    Best regards,

    Ken Sprang

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  • Amending incorporation document to increase shares from 1000 to 15M, how to issue to founders?

    We are two co-founders, formed a Delaware C-Corp in Feb 2015, established with 1000 shares at no par value, Ownership is divided 60-40 between the co-founders, we then filed an amendment & increased the shares to 15M at 0.0001 par value (we didn...

    Kenneth’s Answer

    You may be putting the cart before the horse here. Why have you gone to 15 million shares with no investors on hand. If you get outside investors they will be clear what they want. If your shares are truly worth $0, you might be able to do a rather exotic stock split and give yourselves the 12 million shares. I am also wondering whether you have proper bylaws, etc. and whether directors have been properly elected and shares properly issued.

    My partner and I do a good deal of this kind of work and much of it in Delaware. To be helpful I would want a great deal more information, including the nature of your business, the product or service to be sold, and whether you have the requisite business plan and financials for outside investors. I am also wondering why you have chosen a C corp rather than making an S corp election, unless you know you are going to have institutional investors in short order.

    You are in an arena where you could shoot yourselves in the foot and raise questions in the minds of investors absent your retaining counsel to make sure all is in order.

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  • Sole Proprietorship which visa could you request

    I would like to open my own business via a Sole Proprietorship and therefore being able to stay in the USA. Which visa can I apply for ? E1 E2? Would the Sole Proprietorship be enough to have the visa granted? Thank you

    Kenneth’s Answer

    I fear you are going to find it much more difficult than you anticipate. If you establish a U.S. company you would not automatically get a visa. I suggest that you contact the U.S. UCSIS, the immigration office to inquire about the requirements for a U.S. visa.

    Good luck.

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  • I'm passionate and highly driven to start a business. No clue where to start.

    I'm divorced and he stole my assets. I'm broke but, my eagerness to learn, passion and drive keep me going.

    Kenneth’s Answer

    There are innumerable ways to answer this question. Of course, it is best to have an idea of what you want to do and what you think you can do to start. Then I would explore whether Houston has one or more business incubators. Also consider calling the federal Small Business Administration (SBA). One could discuss LLC's, corporations and the like, but I think that is putting the cart before the horse. Franchises are often an option but they usually require a lot of money up front. I would suggest that you start by reaching out to free local or government resources.

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  • Moving LLC from one state to another - NY to NC.

    I own a LLC in new york state (singe owner, and no employees). I work out of home, and provide IT services consulting to clients. I am relocating to North Carolina. I will not be continuiing to do any business in NY anymore, so i need to move the ...

    Kenneth’s Answer

    In some states redomiciling your company is easy, but New York does not make it as easy as other states to make the move. In order to dissolve your NY company you will have to get consent from tax authority to confirm all taxes are paid. Then you an dissolve. If the same EIN does not matter, it might be easiest to have the NC company purchase assets of the NY company. I suspect NC regulation may be simpler as well--New York is not always the easiest place to be organized.

    As others have said, you can keep your NY LLC, but would then you would still have to register as a foreign company in NC and pay NC fees.

    You do not have to create an enterprise in NC--the question is both the cost of registration in both state

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  • 2 year non competitive agreement while employed. Could be dismiss if the employee is no longer employed?

    The contract reads: "The Client agrees not to solicit or hire any of (company name) employees for a period of two years after termination regardless of cause" If I am not longer employed by this company and the Client decides to hire me after thei...

    Kenneth’s Answer

    If I understand correctly, you were employed by Company ABC. It has a contract with Client, and the contract between the two companies contains the clause your wrote her. Your question is whether Client can hire you after the contract runs out. The answer is "it depends." Non compete agreements are not favored by courts. If you create your own company and Client hires your company, you are more likely than not safe, as the clause will be interpreted very narrowly, and companies owned by employes are not included. Further there is some doubt in my mind whether the clause is enforceable.

    The clause required consideration, e.g., payment to be valid. If the contract between Client and Company ABC provided consideration, then the clause may be enforceable against Client, if Company ABC wants to do that. On the other hand, you have no prohibition against working for Client, and I question whether the courts will enforce the clause when it disadvantages you.

    In sum, I think if Client engages your LLC or the like (and I suggest you use a name far removed from your own) you may be reasonably insulated from Company ABC. If Client hires you directly the question is (1) is the clause enforceable and (2) will Company ABC spend the money to enforce.

    Of course, Client and Company ABC could agree to allow Client to hire you.

    One final note. Florida has recently often treated single member LLCs as if they were individuals and not LLCs. Usually this has had to do with debt and not hiring, so it may not be a problem for you. However, if a Florida court said your LLC was really just you, you might run into problems. Of course, if you are married, your spouse could control the LLC for a time or a trusted relative. That is if your relative owns the new LLC or at least controls it and you are employed by the LLC, I don't think the non compete gets to you because it is not specific and the clauses are disfavored.

    Good luck,


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