Posted by Mohsen Parsa | Jan 06, 2022 | 0 Comments
Blockchain technology and cryptocurrencies globally are at the early adoption or growth stage in the business life cycle, so legislation around these digital assets is severely lacking. But despite the lack of specific laws governing blockchain technology, it is still covered by several existing finance and business laws.
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Posted by Mohsen Parsa | Dec 28, 2021 | 0 Comments
Non-fungible tokens, or NFTs, are the latest cryptocurrency-adjacent digital assets. The legal concerns around NFTS can be divided into two main categories. To begin with, owning an NFT can lead to legal challenges tied to the actual NFT. The second main area of concern connects to the actual transaction itself, wherein someone pays for an NFT. In this blog, we will look closer at potential issues in both areas.
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Posted by Mohsen Parsa | Dec 15, 2021 | 0 Comments
A convertible note is a company debt: a loan carrying an interest rate, which converts to equity (stock ownership) upon the occurrence of a previously decided event such as the successful closing of a future investment round, or reaching a maturity date. A SAFE, in contrast, is neither debt nor equity and places no immediate financial burden on company founders. It is a fairly basic agreement between a company and an investor that gives the investor the right to purchase stock down the road at a lower rate than subsequent investors.
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Posted by Mohsen Parsa | Dec 01, 2021 | 0 Comments
Valuation discounts serve as a lure to make a speculative investment more attractive to potential investors during the startup’s earliest phase. Since investing in a startup is a high-risk proposition, the typical investor is looking for a high return. The discount helps ensure the high return by giving early funders a preferential investment position, allowing their investment dollars to go further in subsequent financing rounds than the same amount of dollars from investors who previously held off on investing.
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Posted by Mohsen Parsa | Nov 15, 2021 | 0 Comments
Valuation cap is a ceiling imposed on the price at which a SAFE will convert to stock ownership in the future. It is the maximum valuation at which an investor can convert a SAFE into equity: a pre-negotiated amount that serves to “cap” the conversion price once shares are issued. If the company raises money above the cap, the investor can invest at a price equivalent to the share cap. When the shares are issued, the investor will receive the equivalent number of shares as if they had invested more money.
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Posted by Mohsen Parsa | Oct 30, 2021 | 0 Comments
Twenty-first-century American consumers are more aware than ever that their choices in the marketplace have ramifications for the climate, ecological balance, and animal welfare. Expectations are high for products and services that put the least possible strain on an increasingly fragile world. California consumers who find claims for environmental sustainability falling short of the mark have legal recourse under the state’s Consumer Legal Remedies Act (CLRA)—so long as they meet the law’s requirement for specificity.
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Posted by Mohsen Parsa | Oct 15, 2021 | 0 Comments
A business should never condition its CLRA correction offer in response to a valid notice of violation brought by a consumer on the basis that consumer waive all present and future claims against the business.
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Posted by Mohsen Parsa | Oct 01, 2021 | 0 Comments
When first beginning a company, many startup owners think that setting up the company as a Limited Liability Company (LLC) is the best option for the company’s structure. They believe that an LLC offers the owners protection from the company’s debts and liabilities similar to a corporation. And at the same time, the LLCs’ “pass-through” nature, distributing profits to partners, means that the startup’s founders can avoid the “double-tax” from corporate and individual filings. While this is partially true, if you’re doing a cost-benefit analysis of an LLC, make sure you understand the true implications of its structure. Because it turns out that the very same reasons an LLC may appeal to you may be reasons why investors may decide not to join your company.
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Posted by Mohsen Parsa | Sep 15, 2021 | 0 Comments
The CLRA prohibits certain kinds of competitive practices. It tells sellers what they can’t do to persuade a potential buyer to purchase or lease a product or service “for personal, family, or household purposes.” In a highly competitive market, it’s not always easy for sellers to do the right thing. And even though the customer service maxim is “the customer is always right,” sellers need to know how to handle false CLRA complaints.
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Posted by Mohsen Parsa | Aug 30, 2021 | 0 Comments
California’s consumer protection law — CLRA — provides ways for individual consumers (“private right of action”) and qualified consumer groups (“class actions”) to seek damages from a business — which could be anything from a mom-and-pop store to a large corporation. The businesses that offer their products or services to consumers in California should educate themselves with the CLRA requirements to avoid hefty and expensive CLRA lawsuits.
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Posted by Mohsen Parsa | Aug 15, 2021 | 0 Comments
The CLRA governs both purchase and lease agreements for goods or services purchased or leased “for personal, family, or household purpose. The agreement doesn’t have to be an enforceable contract and doesn’t have to be in writing.
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Posted by Mohsen Parsa | Jul 30, 2021 | 0 Comments
The CLRA casts a wide net to rein in deceptive sales and marketing practices: misrepresentations and downright fraudulent schemes to delude vulnerable and even cautious consumers. Read this blog to learn more about the CLRA requirements affecting your business.
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Posted by Mohsen Parsa | Jul 15, 2021 | 0 Comments
California enacted the California Civil Code §§ 1750 et seq. in 1970 to protect consumers from being taken advantage of by businesses and allows consumers who have been deceived in this way to recover damages. As with many aspects of the law, responding to CLRA demand letters is complicated. To reach a satisfactory outcome—and to avoid paying exorbitant legal fees racked up by plaintiffs—legal help is necessary.
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Posted by Mohsen Parsa | Jun 30, 2021 | 0 Comments
There's no easy way to respond to a false or exaggerated Consumer Legal Remedies Act ("CLRA") claim for California businesses. You need to prove the claim is invalid with evidence and documentation. However, an experience attorney who specializes on CLRA defense can formulate a strategy to either mitigate your liability to completely defuse the false CLRA claim.
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Posted by Mohsen Parsa | Jun 01, 2021 | 0 Comments
When you get a demand letter, review it immediately. If the claim is legitimate, you only have 30 days to cure the defect or provide a correction offer before the consumer can sue for damages under the CLRA. Don’t ignore the demand letter. A legitimate claim also raises a real possibility that you could face a class-action lawsuit if you don’t cure immediately.
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Posted by Mohsen Parsa | May 12, 2021 | 0 Comments
When a consumer suspects or discovers a CLRA violation, they must send a written notice to the business describing the violation. The business then has 30 days to respond and remedy the situation. Whatever the allegation from the consumer, if the company provides a reasonable correction to repair, replace, or otherwise remedy the situation, the consumer cannot seek additional monetary compensation from the business. There is no set-in-stone definition of what a reasonable correction offer entails, and therefore businesses are encouraged to involve an attorney who is well versed with CLRA requirements.
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Posted by Mohsen Parsa | Apr 16, 2021 | 0 Comments
This blog will discuss the requirements that every home improvement contract must include to be in compliance with applicable California laws.
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Posted by Mohsen Parsa | Apr 06, 2021 | 0 Comments
The California Consumers Legal Remedies Act (CLRA), provides consumers with protection against false advertising, fraud, and other unfair business practices. It also allows consumers to bring legal actions to recover damages when they have been misled. But what if they don’t discover the fraud until quite a bit of time has passed? It appears that absent exigent circumstances, California courts are inclined to adhere rather strictly to the three-year statute of limitations on CLRA cases.
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Posted by Mohsen Parsa | Mar 31, 2021 | 0 Comments
For most startups, early financing comes from two places – friends and family or angel investors. Now, the investors in the friends and family round are not necessarily real friends or family members, though they can be. Generally, they are investors willing to invest their personal finances beca...
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Posted by Mohsen Parsa | Mar 18, 2021 | 0 Comments
Domestic and foreign corporations must file Annual Reports in Delaware. The limited liability companies, limited partnerships, and general partnerships do not need to file an Annual Report but they still have to pay their taxes.
Continue ReadingPosted by Mohsen Parsa | Jan 19, 2021 | 0 Comments
Under California law, foreign doesn’t mean a foreign country. It simply means a business that was created in a state other than California, and if you want to do business in the Golden State, you need to qualify or register your business in California.
Continue ReadingPosted by Mohsen Parsa | Jan 11, 2021 | 0 Comments
Does the family that invests together stay together? Under Internal Revenue Code section 318(a), you might be taxed together. Or at least one of you might bear the burden for the entire family’s corporate stock investments. If you and your spouse and children all own stock in the same corporation, section 318 could lead to some surprises at tax time.
Continue ReadingPosted by Mohsen Parsa | Dec 22, 2020 | 0 Comments
The internet makes online innovation and entrepreneurship an easy endeavor. But if you’re contemplating starting an online business in California, there are many legal considerations you should take into account. And it doesn’t end with simple contracts for business ventures. You’ll need to consider the legal ramifications of every decision you make, from your business entity to online data privacy.
Continue ReadingPosted by Mohsen Parsa | Dec 10, 2020 | 0 Comments
Ending a business is rarely an easy decision. But following the proper procedures to formally close it down should be a no-brainer. Formally dissolving your business entity will end its legal existence, but it also reduces the individual liability of a business’s members or shareholders. Failing to end a business formally can leave you open to creditors, lawsuits, and ongoing state filing requirements, penalties, and taxes.
Continue ReadingPosted by Mohsen Parsa | Nov 20, 2020 | 0 Comments
The CLRA is one of the most powerful consumer protection laws in California. Not only does the CLRA make practically every type of misrepresentation illegal, but it also requires companies that are found guilty of violating the Act to pay the attorney's fees and court costs of a consumer who is successful in showing that the company violated the Act. There are several mistakes merchants frequently make that can cause them to run afoul of the CLRA.
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