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September 19, 2017 brian prokopowich0

 

 

Introduction

The case of Hibberd v. Hurricane Hydrocarbons Ltd. involved various issues regarding many stock options that were not exercised that were part of a consultant contract.

 

Facts

If you read through the 150 paragraphs of this case, you might find that the minutiae of details within the judgement are like the digressions on Targaryen history in Game of Thrones, interesting but not exactly necessary information. So I will summarize:

 

The defendants, Hurricane Hydrocarbons Ltd., had engaged the services of the plaintiff, Mr. Hibberd, and his company, for the purpose of raising capital for the defendant to purchase a company in Kazakhstan.  As part of the agreement for the plaintiff’s services, in lieu of money they were verbally offered 100,000 stock options.

A written agreement came into effect for 50,000 with a termination clause that the option may be exercised any time until 60 days after his services are terminated, or before the options expire.

According to the plaintiff – the contractor – who signed off on these options, he was given representations that it was a standard clause and it wouldn’t be exercised.

The plaintiff entered into another agreement for 50,000 stock options that included a termination clause. It was the plaintiff’s understanding that the contract would not be terminated until after the options expired – and this was confirmed verbally, according to the contractor.  Later, the defendant terminated the contract in question. The plaintiff did not exercise his options within the 60 days period of the termination, but he attempted to exercise the option months later.

To finish reading the Clausehound blog: Click Here

This blog was originally posted by Farrah Roahman

Co-authors: Brendan Sheehan and Rajah Lehal

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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August 31, 2017 brian prokopowich0

Directors – names are (in most jurisdictions) recorded on the public registrar, role is to protect the shareholders, accept some legal liability, vote on company major decisions. No hands on day-to-day activities.

Executive Director – same as above, but also in an executive role (e.g. President), with hands on day-to-day operational activities.

Advisors – No voting rights, usually are experienced or well-connected business people, guide the founders.

 

Compensation may vary for directors/advisors 

I had previously written in this article that whether a company has a board of directors or a board of advisors, compensation is flexible.

A company may choose to compensate either a director or an advisor in cash, with options, a combination of cash and options, cash only, or the company may even choose not to compensate such directors. This is not a critical factor for choosing a board of advisors over a board of directors or vice versa. 

Public company board of director positions can receive seven digit compensation.  At the other end of the spectrum, a startup company more likely can offer options for compensation.  When offering option-based compensation consider the following:

To finish reading the Clausehound blog: Click Here

This blog was originally posted by Farrah Roahman

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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July 25, 2017 brian prokopowich0

When you’re involved in a contractual dispute, the process for resolving the dispute should be set out in the contract itself.

If the contract is silent on the point and you can’t resolve your dispute, you will have to use the courts. This can lead to disagreement about which courts have jurisdiction, so it is important to include clauses dealing with both governing law (what law applies) and jurisdiction (which courts can decide a case) in your contract.

To finish reading the Clausehound blog: Click Here

This blog was originally posted by Farrah Roahman

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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June 3, 2017 brian prokopowich0

Except for few specific circumstances, it is almost considered ancient to have parties to a contract physically meet up to a sign a contract in a boardroom. With the fast-paced lifestyles of most high-level executives, a more efficient method of signing contracts has been introduced: the e-Signature.

 

Although convenient, do e-signatures really create a valid and binding contract? Can e-signatures really replace hand-written signatures?

To finish reading the Clausehound blog: Click Here

This blog was originally posted by Farrah Roahman

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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May 2, 2017 brian prokopowich0
An Invention Assignment Agreement, often known as an Intellectual Property (“IP”) Transfer Agreement, is an agreement where one party assigns its intellectual property rights to the other party, either absolutely or subject to compliance with the terms of the underlying agreement.

This means the inventor (eg. software developer) assigning his/her rights can no longer claim the property as their invention. The property now belongs to the person to whom the rights have been transferred.

To finish reading the Clausehound blog: Click Here

This blog was co-authored by Vi Vo & originally posted by Farrah Roahman

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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May 1, 2017 Meg Marshall0

Insurance. It can sound like such a scary thing, but it really doesn’t have to be. In fact, it can be really helpful and may be a legal requirement in some circumstances. If an entrepreneur has never had their own business before or never needed commercial liability it can be very overwhelming. It is important to note that home and auto insurance are usually considered separate policies than commercial liabilities and coverage. We caught up with KASE Insurance, who specialize in small business, manufacturing companies, commercial needs and have a big heart for startups. We spoke with the fun, dynamic yet extremely knowledgeable partners of KASE. Stanislav Kojokin and Arian Ebrahimi provided some phenomenal insight and provides various examples and stages of what type of insurance might be needed. 

Arian and Stanislav of KASE Insurance give some amazing tips to consider when to insure a startup.

Q: Why should a startup get insurance?

A: Many startups believe that they are not big enough to need insurance and want to wait until more sales are generated or more assets are purchased. The reality is that having insurance should be in the budget from day one. As soon as a company starts operations and has customers, protection is needed.

Q:  Even if a startup is an app (application) and NOT producing any tangible products, would they still need insurance?

A: If the startup is generating revenue, they need liability insurance to make sure they are protected. Even if the company does not have a tangible product, their customers could claim that they suffered a loss as a result of the professional advice or the completed operations of the start up, at which point the start up would have to defend itself.

Q: Are there certain legal documents that would classify a company as a startup?

A: No.

Q: At what stage or point should a startup consider insurance?

Insurance needs should be considered part of the budget of a startup, suggests KASE Insurance.

A: It will be a great idea for you to consult with an insurance advisor before any of the following:

KASE Study #1: Start up company about to launch the beta version of their new product or software. Their client asks them to provide proof of insurance before signing a contract.

Insurance solution: Errors & Omissions Liability (E&O), Cyber Liability

Why is it important:  This insurance coverage helps protect professional advice- and service- providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and certain damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, an error or omission in the service or product sold by the policyholder. These are potential causes for legal action that would not be covered by a General Liability Insurance Policy which addresses more direct forms of harm. Cyber/Network Liability can usually be added to an E&O Policy to protect your exposure of a network going down or private information leaking and causing financial damage.

KASE Study #2: The start up company has outgrown the co- working space, and is looking to move into the new private office. As a condition of the new lease agreement, they are required to provide proof of insurance to the new landlord.

Insurance solution: Commercial General Liability and a Commercial Property  

Why is it important: Commercial General Liability covers bodily injury or property damage cause to a 3rd party. Commercial Property coverage protects a business’s own business property within the office.  This policy can also cover the loss of use of the premises in the event of a covered loss such as a fire.

KASE Study # 3: You are trying to put a board in place made up of experienced industry veterans. One of the potential candidates is asking you if he will be covered under your company’s insurance policy.

Insurance Solution: Directors & Officers Liability (D&O) Insurance

Why is it important: Provides coverage for a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers of the company

KASE Study # 4: You have hired employees to help you grow your start up.   

Insurance Solution: Employment Practices Liability

Why is it important: Protect your organizations against employee suits for discrimination, wrongful termination, sexual harassment, failure to hire, etc. The key here is to remember: Even if you are in the right, it doesn’t mean you will not have to defend yourself.

KASE Study #5: Your business cannot operate without you the founder, or one of your key employees. Investors are concerned about the company’s future should something health related happen to that individual.

Insurance Solution: Key Person Insurance

Why is it important:   

The insurance company will a lump sum of tax free money to the corporation. These funds can be used to compensate for the loss of sales or the cost to hire a replacement for key individual.

KASE Study #6: You want to attract and retain the right talent to help you grow your business and are in search of employee incentives.

Insurance Solution: Employee Benefits- Health coverage

Why is it important: Your employees will have piece of mind when it comes to health-related expenses should they have health related issues.

Q: What are common components that are included in insurance policies (specifically for startups)?

A:  First and foremost, the startup should obtain a commercial general liability policy to cover their products and their completed operations. Depending on what the startup does, they may want to consider errors and omissions insurance as coverage for professional liability is typically excluded from a commercial general liability policy.

Q: Why does KASE insurance like working with startups?

KASE Insurance specializes in commercial insurance and can truly help startups!

A: KASE Insurance is a start up! We know the struggles startups go through in getting the attention they need. Startups are often neglected because of their small size and potential for failure so as a result, they are not usually getting the right attention from their insurance brokers. KASE Insurance prides itself in being an active resource for insurance and risk management for companies of all sizes.

Q:  What are some of the common mistakes that startups can encounter if they don’t have insurance?

A: Many startups will consider insurance when their customer or a landlord is asking for proof of the coverage. At that point, the startup may be scrambling to find insurance and will likely purchase what is readily available to satisfy their contracts. With more time and attention, an insurance broker can shop the market and find a more suitable product for the startup to buy.

Now, please. Do yourself a favour and get some insurance and do not jeopardize your idea, team and dream.  

A big thank you to Stanislav and Arian from Kase for lending their time, insight and knowledge to better prepare and protect fellow startups and entrepreneurs.


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April 17, 2017 Meg Marshall0

Twitter was one of the first social media platforms that took the world by storm. Created in March 2006, it now boasts 319 million users worldwide according to staista.com. From churches and not-for-profits to celebrities, up and coming companies and big national brands, Twitter has created a way for people to connect and do business with one another. The creation of Twitter parties or Twitter chats help create a virtual meeting spot for like-minded individuals to come together to discuss and collaborate. Here at Startup Tech Unleashed, we hope to bring people together and host monthly Twitter chats, usually in a question and answer format.

How Does it Work?

  1. To begin, a host and/or moderator will predetermine a date, time and topic. Be sure to know the correct timezone that it is being held in!
  2. Know the hashtag for the chat. This is important because it allows users to find and be found during the chat throughout the Twitterverse. Be sure to include the hashtag in all responses. And if enough users are participating, maybe the hashtag will become a trending topic (this refers to the column found on the left hand side on a desktop view, noting the top 10 hashtags in a given area). 

  3. Upon the start of a chat, introductions are made. If users also state their location, it is fun  to be able to reflect back and see what the reach of the chat was. Was it locally, provincially, nationally or even internationally?
  4. It is crucial to adhere to the syntax of questions and answers so that moderators and other users understand what comments/answers belong to which questions. Here is a sample of how things will appear: (insert diagram). As participants see other responses and want to respond to questions earlier in the chat, they simply need to just use “A1 – xxx” or “A3 – xxx”. Again, this just ensures easier organization and logistics for everyone. 

  5. Be an active participant! A chat in only as effective as the participation. Add insightful thoughts and recognition. Favourite and like other participants’ responses and also show support by retweeting. Not everyone is going to agree on everything. And that is ok, however it is important to be clean, play nice and treat others with respect. Providing constructive criticism can be done in a positive manner. What is awesome is when everyone shares resources, suggestions and give kudos to others who provide great insight.
  6. Continually check the hosts’ account for the most recent questions asked. Also, enter the chat hashtag into the Twitter search bar. Select the tab titled “Latest” to see the comments being left. If “Top” is selected, only the most active comments are shown i.e. the posts with the most “likes” or “retweets”. 

  7. Have fun! This is key! Make some new connections and friends. 
  8. Should any questions or concerns arise, be sure to flag them to the host and/or moderator by sending them a direct message or tagging them in a comment.

We look forward to meeting and chatting with everyone soon. Check the events section of Startup Tech Unleashed to determine when the Twitter chats will be held.

 


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March 18, 2017 brian prokopowich0

Everyone is looking to offer that next top-selling app, but it’s not as easy as it looks. First, you have to come up with an idea that is innovative and hopefully not already taken. Once you have that idea in mind, the next hurdle is bringing that idea to fruition while avoiding theft of your hard work. Here are some tips on how you can protect yourself.

Tip #1: Prepare a Non-Disclosure Agreement

 

One basic way to protect yourself is to have a standard non-disclosure agreement prepared. To get your ideas rolling, you will have to work with many different people. It is fantastic if you can only work with people you trust, but usually that’s not the case, so don’t take any chances! A non-disclosure agreement will require anyone who works with you to discuss your confidential information only with those who need to know the information, such as yourself and team, and to not share the information with anyone else.

 

To strengthen your protection, consider a non-competition agreement as well. Unlike a non-disclosure agreement, which protects confidential information from being shared, adding a non-competition agreement would prevent anyone who has worked with you from competing against you to build the same kind of app. This agreement would be particularly useful when your ideas are in the early stages and can be easily recycled by others in other areas.

 

Check out a sample Non-Disclosure Agreement here!


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March 7, 2017 brian prokopowich0

Serial entrepreneurs are constantly coming up with the ‘next big idea’. During the excitement of starting the process of building a business, incorporating might not be the first thing on an entrepreneur’s mind. Employees might be promised shares in a corporation that doesn’t even exist. Can the employees enforce this promise?

 

Check out Clausehound.com’s blog post on this topic to learn more!

http://blog.clausehound.com/can-founders-promise-equity-in-company-doesnt-yet-exist/?utm_source=startupTechUnleashed&utm_campaign=promiseEquity&utm_medium=referral


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March 6, 2017 brian prokopowich0

Terminator, Eagle Eye, The Matrix…robots always come back to crush the humans whenever they are given too much intelligence or too much feeling…or at least they make a point to enslave all of humanity.

Where do we draw the line? We’ve begun to see ads for Google Voice and Alexa which champion the fact that AI can do anything for you from scheduling appointments to making purchases online.

With companies already there for ‘home monitoring’ or ‘make everything electronically accessible’, such as locking your door, watching your security cameras or using appliances, how far are we willing to let artificial intelligence and tech giants into our minds and homes?

I’d like to bring up a few points regarding the need for tech in our everyday activities, starting with the most obvious argument, privacy. Hopefully, bringing some things to your attention you haven’t thought of.

Let’s say you want to use Alexa to buy a desk, off of Amazon of course, they made Alexa. It seems harmless, Amazon already has your credit card info online, so what’s the difference? The concern should come from the it’s always listening argument. Phones are already doing this, that strange feeling where you’re talking about something with friends and the next time you go on a device it’s being advertised to you; that’s because Google is listening.

This may come to a shock to you, but this is how it is these days and it is being normalized. A lot of apps ask for access to your microphone for this reason, which is why I don’t have the Facebook app, because frankly I trust them the least.

If you’re okay with your Amazon AI consistently listening to you and your family in your home like Scarlett Johansson then so be it, I’m sure the government would never acquire that information if necessary (*hard wink*). At this point I have many things through Google and I’d rather not add more to the list of companies that know everything about me.

Normalizing Non-Human Consciousness

The other day I saw an ad for a robotic dog that actually woke someone up from their sleep, to ‘play with’ it. At that point I decided that was the worse product of all time. Assuming we aren’t far off from making robot dogs soft, squishy and loveable, do we really want to venture into replacing real, living things with forms of seemingly awesome tech for ease, or to replace a loved one so that we don’t have to miss them?

In case you missed it, we can already map a human consciousness into a machine, no not just like a Johnny Depp movie, but some have already done this. It seems very scary to think we could one time incorporate robots into our everyday life.

Should we rely on it for the most human things like loved ones, pets or day to day interactions…

Should We Rely so Heavily on Tech in our Everyday Lives?

I’m sure most of us are comfortable with forgetting GPS coordinates and phone numbers, leaving that up to our devices. What else should we forego? What does this do to an economy?

These are conversations we need to have. Amazon releases a lineless grocery store and boom! There goes what, 50 potential jobs? How much further are we willing to go in terms of eliminating human contact? Because it’s already causing problems in other parts of the world; Japan basically just released a virtual girlfriend-err-assistant which will send you texts during the day.

Korean women are majority not interested in marriage while half of the Japanese youth aren’t interested in sex or relationships. It’s almost like looking into the future reading those articles, as you begin to see what long term use of technology results in: lack of relationships and human interaction. When you replace sex with porn, social outings with gaming and relationships with virtual assistants, the rate of marriage, children and relationships/sex starts plummeting at rates Generation Tinder seems destined to move towards.

Less human interaction being bad for the economy is a topic not to be ignored.

It’s already happening here; millennials are having the least sex, making the least money and are staying at home longer. Maybe a valid argument can be made that all three are tied by the economy’s state, or you can use any number of social-justice positions pushed forward, but one hand seems to wash the other and perhaps we need to ask (or re-ask) the now recurring question: is technology bringing us closer together or further apart?