As office space in the area becomes more and more scarce, businesses are getting more and more desperate to find a location that meets their needs. A few things to consider (besides the cost) before signing on the dotted line are outlined by Suzanne Baugh of the Staubach Company in the June 16-22 Puget Sound Business Journal. She says most of the day-to-day issues of the landlord-tenant relationship cannot be outlined in the lease so it's very important to find a landlord with a good reputation of being honest and fair. In addition, you should know how well the building and its equipment are maintained. Building amenities and mix of tenants may impact your ability to recruit talent as well as make an impression on clients. Keep in mind, also, the size of the space and whether the building allows for your company to grow.
In the past, businesses have seen their outside counsel take an active role on their Board of Directors. Since the passage of the Sarbanes-Oxley Act, many large law firms have stepped away from this practice due to a potential conflict of interest that the attorney may have in playing the dual role of attorney and Board member. The issues raised are predominantly related to liability in the case of a shareholder lawsuit and the drive for independent Board members with no financial ties to the company. This trend suggests a bigger picture issue for growing companies with plans to go public: Structure your Board of Directors to support your business with independent ideas and thoughtful members who will ask the hard questions. This group provides you a way to gut-check your decisions and to keep your business on track. Use it wisely.
On January 31 of this year, the Washington Law Against Discrimination (WLAD) was modified to include sexual orientation as a protected class against employment discrimination. The provisions became effective on June 7. In the WLAD, sexual orientation is defined as "heterosexuality, homosexuality, bisexuality, and gender expression or identity". "Gender expression or identity" is further defined as having or being perceived as having a gender identity, self-image, appearance, behavior, or expression, whether or not that gender identity, self-image, appearance, behavior or expression is different from that traditionally associated with the sex assigned to that person at birth." Employers may not: 1) refuse to hire; 2) discharge or bar from employment; 3) discriminate in employment terms or compensation; 4) make inquiries about sexual orientation in hiring; 5) permit harrassment creating a hostile work environment; and 6) retaliate against an individual who has opposed a practice forbidden by the WLAD. For many employers, this change in the WLAD will not affect their current policies and practices. That being said, employers must be particularly aware of biases among employees and clearly communicate company policies to ensure a respectful, inclusive work environment. In addition, it is critical to monitor hiring, promotion, and disciplinary decisions to ensure decisions are made in compliance with the WLAD.
Anytime you have more than one owner or member in a business and those owners or members have the ability to transfer their ownership shares, you need to take into account both Federal and State securities laws. The securities laws are in place to protect investors by ensuring that basic facts about an investment are available to them. The laws require registration with the appropriate State agency and the Securities and Exchange Commission (SEC) in the form of a detailed prospectus. Privately held companies typically look for exemptions from registration when obtaining funding from owners or outside investors. Exemptions exist for “accredited investors” who are presumed to be sophisticated enough to understand their investment due to their net worth or income level. A security is not only ownership or membership in a corporation, LLC or partnership but other items such as warrants, promissory notes, and stock options may also be securities. In addition, if you have an owner with passive investment in a limited liability company or partnership, this ownership may also be construed as a security. Bottom line: Companies with multiple owners or are otherwise selling or giving away a percentage ownership in your business, you should consult an attorney familiar with securities laws to ensure you are in compliance with both Federal and State laws.
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