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Portland Business & Commercial Law Blog

5 things to know before starting a business

Starting a business can have many daunting challenges. If it is your first startup, you may be more vulnerable to common mistakes.

According to a report from Small Business Trends, about 50 percent of startups fail before their fifth year. This is due to a variety of factors, one being lack of preparation.

Business litigation regarding stock purchases will grind forward

Litigation among businesses in Oregon and elsewhere ranges over a wide gamut of imaginable issues. Businesses, just like people, will continue to create and find conflicts that need to be resolved by the court system. One general area of business litigation involves disputes over stock purchases and attempted takeovers of publicly-traded businesses by investors.

One example of one form of this kind of dispute is occurring now between investor Gaylon Lawrence and CapStar Financial Holdings. Lawrence, who owns several financial lending institutions, built up a 10 percent stake of stock ownership in the bank holding company. The company objected on the basis that Lawrence violated several laws in the process. It is alleged that he broke securities laws and banking regulations.

Business law attorneys oversee shareholder disputes

Shareholder disputes occur often in publicly-traded corporations, including in Oregon. There are a myriad of issues that can cause shareholder concern and a number of different ways in which shareholders may register their concerns. One way to do this is to raise shareholder concerns at the annual meeting. When such disputes become known, the company's attorneys are mobilized to monitor the situation and follow through if it may turn into an actionable business law dispute.

Such turmoil occurs even at the largest corporations. On June 7, Alphabet, the parent company of Google, held its annual shareholder meeting amidst a mini-resurrection of Google employees who came forth to challenge management regarding diversity in management positions, according to CNET. It may be that the disputes over a Google report on the gender gap that emerged in 2017 ignited a permanent area of interest regarding diversity at the company.

Contracts are necessary between influencers and businesses

Traditional mass marketing tools are being bypassed to some extent in Oregon and nationwide with respect to business marketing trends. The social medial platforms, with their increasingly sophisticated methods of digital marketing, are becoming more popular and more prominently used. With this trend, it is necessary for companies to consult with experienced business law and ecommerce attorneys to assure that the relationships with the so-called influencers are governed by secure, protective legal contracts.

In March 2018, the National Media Council issued regulations to require licensing of influencers, defined as those who promote brands through social media platforms and online methodologies. As a business owner, steer the company only toward licensed influencers going forward. Where the influencer is touting the number of followers it commands, check it out and make sure that they are real and not phantom followers.

Mergers for payment of cash and stock are common in business law

Mergers and acquisitions in Oregon and elsewhere can be financially complicated. Sometimes, the purchase price for acquiring another company is paid partly or totally in shares of stock of the purchasing company. Such transactions may contain risk but generally a team of business law attorneys and financial experts calculate the elements and benefits of the transaction very carefully in advance.

One recent merger transaction in another state involved partial payment in shares of stock for the purchase price. Emclaire Financial Corp. entered into an agreement to acquire Community First Bancorp Inc. for stock and cash that totals $17 million. Emclaire is a banking institution that has 17 branch offices in its region. Community First is a smaller financial firm in the same geographical region with four branches.

5 FAQs for businesses on data privacy protections

With the adoption by the European Union of new privacy protections, the use of customers’ data by businesses will be under increasing scrutiny in the U.S. as well as in Europe. The new protections take effect today.

If you are a business owner or manager, it’s important to understand what the new protections are and how they may affect you.

Contracts can provide for arbitration of workers' disputes

The validity and enforcement of arbitration clauses in contracts has been a volatile issue in business litigation courts in Oregon and the rest of the country. Such clauses come up in a number of contexts. Some are inserted in credit card contracts to compel consumers to arbitrate disputes rather than sue the company. They exist widely in contracts between businesses, calling for arbitration instead of litigation.

In general, the trend has been for the courts to uphold the validity and enforceability of such clauses. The U.S. Supreme Court ruled on May 21 that companies may compel their workers to engage in arbitration regarding wage and other employment disputes. The decision came from a hotly divided 5-4 vote of the Justices. The decision has a decidedly anti-union type of perspective in that it says that employers can prevent employees from acting together to bring their claims collectively or in class actions.

New business formation is at the center of economic recovery

Business attorneys in Oregon often encounter new companies being formed through the means of venture capital investments funding just for innovative startup companies. The founders of most startups also take on a degree of risk as do all business owners. Business formation in this context often involves the participation of a business law attorney who is experienced and adept in working with entrepreneurial ventures.

In 2018, surveys indicate that the rate of entrepreneurship is at one of its highest levels of growth. In fact, a review of data sources by Paychex reveals that entrepreneurship was a strong factor in fueling the economy's growth out of the recession. New business formation by entrepreneurs is viewed as a powerful force in creating jobs and fueling the economy.

Business litigation case involves dispute over smart meters

Legal disputes in Oregon and elsewhere do not always involve exclusively private business interests. There are often public agencies and municipal authorities that are involved in business litigation controversies. Public entities execute many contracts with private companies for services and products, opening the door for conflicts and disputes that sometimes make their way into the state and federal court system for resolution.

One recent example in Oregon of a dispute between a private entity and a public agency involves a lawsuit filed in state court against the Eugene Water & Electric Board. A manufacturer of smart meters, Sensus USA, sued EWEB and obtained a temporary restraining order stopping the agency from releasing the details of its contract with Sensus to its customers. The dispute arises regarding a lengthy contract in which EWEB agrees to pay Sensus $20.2 million for a smart meter system, which is also called an advanced metering infrastructure.

New business formation centers on trailer-leasing industry

Business formation in Oregon may include the situation where a business law firm represents a new startup venture that is formed by experienced executives in a certain industry. An example of such a new business formation occurred recently in another state when two fleet trailer executives started a new company called Boxwheel Trailer Leasing, LLC. The company was backed with a significant capital investment from Crosstimbers Capital Group, a private investment firm.

The two entrepreneurs starting the company have extensive backgrounds in running large trailer fleets. They stated that they intend to offer a premium experience to customers. Their exemplary track record in the industry is a big plus in attracting investment capital into the young venture. For Crosstimbers, its co-founder declared the new company to be just the kind of entrepreneur-owned company that fit its investment strategy.

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