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Miovision Scout is changing the game… again

Clausehound’s partner organisation, Catalyst, is promoting a new product by one of their member companies, Miovision. This new product illustrates the value of the Internet of Things (“IoT”) technologies and how they can continually improve efficiencies for a business or municipality. These are capabilities beneficial to all entrepreneurs and  can be  applied in a wide variety of commercial contexts!


To read the full article by Miovision, please follow this link.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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CPD Finance Conference 2017

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CPD Finance Conference 2017

Clausehound’s partner organisation, CPDonline.com, will be hosting an event for small business CFOs and finance professionals focused on common legal issues that can arise over the course of business operations. Clausehound.com’s Founder & CEO, Rajah Lehal, will be speaking to attendees about legal drafting. This is a great event for anyone interested in acquiring the financial skills required to operate a successful venture! This is a full-day event taking place at KPMG LLP, 333 Bay Street on June 5, 2017.

 

 

To see more information about CPDonline’s event, please follow this link.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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What legal rights do I have where an employer promised shares but did not deliver?

Trust is a big part of any deal, and  a situation where you’ve been hired and promised shares but never received any is a major breach of that trust. But does that trust translate into something legally binding, that when broken, gives you options for legal action?

 

The answer is in the details. When you say an employer has “promised” an employee shares, that can mean a few different things. If a verbal or oral agreement was made, it can be difficult to prove, even if it would otherwise be legally binding. If the shares were promised in a written agreement but never delivered, it can be much easier to force the employer to make good on the promise.


 

Verbal promises

Whether or not a verbal agreement is legally binding and enforceable depends on a number of important facts.

 

First and foremost is an employee’s ability to prove that a verbal agreement took place. This will require trustworthy testimony, and a clear reference to it in emails, messages, documents, journals, and so forth can be especially helpful. In cases like Druet v. Girouard (2012) (NBCA), email strings were accepted as verification of consent even when the electronic signatures themselves were disputed for not being totally accurate reflections of a person’s written signature. Supporting evidence lends weight, so don’t underestimate the importance of sifting through those emails!

 

Once the verbal exchange is proven to have taken place, the question becomes whether the elements of a binding agreement are present: an offer, acceptance, and consideration. That means there should be an identifiable exchange of something for the promise made, like money, or agreeing to accept a job in exchange for the promise of shares, to make the promise legally enforceable.

 

In the case of Fedel v. Tan (2010) (ONCA), Tan and Fedel started a new business together. They verbally agreed that Fedel would retain 60% ownership for organizing and administering the business, while Tan would retain 40% ownership for his financial involvement. Upon incorporation, Fedel received 100% of the shares issued, and Tan received none.Tan sued, and the judge looked at Tan and Fedel’s shared business history to determine that Tan had been entitled to 40% of the company. However, the judge decided against issuing shares to Tan. Because the business relationship between Tan and Fedel had been irreparably harmed by the dispute, ownership of shares in a closely held corporation would no longer have been a satisfactory result. The remedy instead was compensation.

 

So if you are entitled to shares, and can prove it, a court will still look at the particular circumstances to decide what the appropriate remedy will be, and this may not be the promised shares.

 

Written promises

If your employment agreement contains a provision entitling you to a particular number of shares at a particular point in time and you do not receive those shares, you may be able to bring an application in court to compel the employer to transfer the shares to you according to the terms of the employment contract.

Of course, this will not enhance the quality of your relationship with your employer! You are better off trying to use friendly channels to obtain the shares.

 

Stock Restriction Agreements

Before doing so however, you will need to look into the details of the contract. Often, employees or contractors will sign a stock restriction agreement. This contract usually provides that you are entitled to a certain number of shares that will vest over a period of time, for example X number of shares on July 20 each year, or X number of shares on the last day of each month. Until the shares have vested they are ‘restricted.’ Restricted shares can usually be redeemed (bought back) by the company at a very low price if your contract with the company is terminated, or if other trigger events take place (e.g., you are convicted of certain types of crimes). Often you are not entitled to vote restricted shares, and you may not be entitled to any dividends that have been declared. If you are terminated, you will not have a right to the promised shares if they have not yet vested.

 

 

Employee Stock Option Plans

Another common way for employees to believe they have been promised shares is under an Employee Stock Option Plan (ESOP). Your contract may entitle you to a certain number of options per year, or you may only be eligible to receive options if the directors use their discretion to grant options to you in any given year. It is important to check the fine print of the plan to determine what you are entitled to.

 

Once you have been granted options you will be able to exercise them to purchase shares at a set price. You will likely only exercise this option if the share value is at or above the purchase price. Note that the options will have an expiry date and many plans will specify that the company has the right, but not the obligation, to buy back any shares purchased under an ESOP if the employee’s contract is terminated for any reason.

 

To see standard versions of the agreements discussed in this article, visit our Small Business Law Library!

This blog was co-written by Alina Butt.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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City of Toronto Launching Civic Innovation Office to Procure Tech Solutions for City Problems

Clausehound’s partner organization, StartUp HERE, has written an enlightening piece on the City of Toronto’s decision to use private sector technology companies to “help the City deliver better services to the public, while promoting a new approach to problem-solving within government.” Because Clausehound works closely with many software developers and technologists in Toronto, we want to make sure our talented customers are aware of this great opportunity! This initiative is part of Bloomberg Philanthropies which is providing up to $500,000 in grants to Toronto, as well as Anchorage, Alaska; Durham, North Carolina; Austin, Texas; Baltimore, Maryland; and Detroit, Michigan.

To read the full article by StartUp HERE, please click this link.

 

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

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Lawyering in the 21st Century – How to succeed through innovation

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Lawyering in the 21st Century

Clausehound.com was created out of a desire to change how legal services are provided to clients and enable growing business to access affordable legal services & tools. On May 15, 2017, a forum called “Lawyering in the 21st Century  –  How to succeed through innovation” will be hosted at the Legal Innovation Zone, where Clausehound is located. This event will include interactive workshops to provide legal professionals with the skills necessary to drive change in their business. As a company that is trying to provide legal resources in new and innovative ways, Clausehound looks forward to attending this event!

 

To read the full article shared by The Legal Innovation Zone, please click this link.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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NAFTA Tweaks And Your Business

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NAFTA Tweaks And Your Business

“Clausehound’s partner organisation, Bullfrog Insurance, has written an overview the pending re-negotiations of the North American Free Trade Agreement (“NAFTA”). Clausehound wanted to let you know how these renegotiations may impact your small business! As the Trump administration in the United States continues to discuss changes to trade agreements, including NAFTA, Bullfrog Insurance has provided a positive outlook on the potential renegotiations. The article notes that “[w]hile it may seem like an uncertain time for small business, history strongly favours Canadian businesses having the ability [to] face challenges and thrive.”

To read the full article from Bullfrog Insurance, please click this link.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

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What legal documents are required to connect an inventor with an investor?

Startups depend upon funding, so preparing the right documents can help you obtain the funding you need.

Due Diligence

No matter what stage or type of funding is at hand, the biggest thing that all investors will be concerned with is the quality of the investment. This means assessing any and all risks, whether they are legal, financial, or market-based. A company can make this process smoother by preparing, collecting and organizing the appropriate information. To attract an investor,the company should also properly prepare a few key documents that can assure the investor that the investment is a sound one, and that the company is well-run.

Minute Books

The Minute Book is the official record of the company’s activities. It should include all directors’ and shareholders’ resolutions, corporate bylaws, articles of incorporation and any amendments to the articles, corporate registers including a register of directors and shareholders, share register, subscription agreements, the form of share certificates, the shareholders’ agreement (if there is one) and copies of all major contracts. Investors will want to inspect the Minute Book to ensure that all corporate actions have been properly authorized. It is important to keep the Minute Book up to date and organized.

Term Sheet

A startup should provide a term sheet, otherwise known as a letter of intent. This is a non-binding document meant to lay out the big-picture terms and conditions of the potential investment. This means outlining the structure of the investment, including a timeline for funding as well as the transfer of shares and equity (or other securities) to the investor. Specifications about board structure and responsibilities of the investor can also be included, as well as any substantial points to be included in a future shareholders’ agreement.

Share Subscription Agreement  

If the deal has progressed and the investor is ready to invest in the company, a share subscription agreement will be required. This is the agreement that contains the terms of the deal between the company and the investor—how many shares, at what price, at what time, for what form of payment. Depending on the investor, the company may be required to provide representations and warranties that the startup has no existing undisclosed loans, liabilities, material agreements, or ongoing litigation, and that the agreement will not cause the company to breach any of its other agreements. The subscription agreement also typically contains a statement of the type of exemption being relied upon to exempt the transaction from prospectus requirements under the applicable securities laws.

Shareholders’ Agreement

Now that the investor is a shareholder and interested in how the company is being managed, they may wish to have a shareholders’ agreement in place. The shareholders’ agreement is a flexible instrument that can (among other things) protect the shareholder’s representation on the board, limit the board’s ability to make certain decisions without shareholder approval, or protect the shareholders by giving them preemptive rights when more shares are issued in the future. Many minority investors will want to ensure that the shareholders’ agreement protects their rights and investment.

To see standard versions of the various documents and agreements discussed in this article, visit our Small Business Law Library!

This blog was co-written by Alina Butt.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

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Community Legal Services at Western University Presents the 4th Annual Access to Justice Symposium on March 24, 2017

 

Sniffing out awesome startup events, we’re venturing out of the doghouse to check out the 4th annual Access to Justice Symposium hosted by Western University on March 24, 2017!

Topics Covered:

The event’s focus will be on innovative tools for a profitable practice, including (1) discussions about alternative fee arrangements, (2) technology, innovation, and the law, (3) legal coaching, and (4) pro bono law in Ontario. Clausehound.com’s CEO, Rajah Lehal, will be speaking on the technology, innovation, and the law panel. The event’s keynote speaker will be Ontario’s former Attorney General and current Executive Director of the Legal Innovation Zone.

Event Details:
Date: March 24, 2017
Location: London, ON
Time: 9:00am-3:30pm
Cost: FREE
CPD Hours: 5 hours of professionalism credits

 

For more information, please see the Community Legal Services’ website and register directly by emailing clsevent@uwo.ca.

 

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Clausehound.com regularly curates a list of innovation and entrepreneur-focused events. Events we like have insightful speakers and provide attendees an opportunity to network with entrepreneurs, and learn from others within the community.

Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound.com offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

 

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Disclaimer: This database is provided for informational purposes only and copying, downloading, or use of any content on this site in any way does not create a lawyer-client relationship with the reader. ClauseHound Inc. does not provide legal advice, nor should any advice from ClauseHound Inc. be construed as such. Read the Full Disclaimer