Business law.
In plain English.

Business Disputes

A private dispute-resolution process in which an arbitrator or panel decides a dispute under an agreement or applicable law. An award is often binding and subject to limited judicial review. The arbitration clause can determine which claims are covered, the procedures, location, costs, and decision-maker.

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Ownership & Governance

The legal power to commit a company to a contract or other obligation. It may come from actual authorization or from the company’s conduct creating reasonable apparent authority. A person’s ownership percentage or claimed title alone does not resolve whether they can bind the business.

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Business Disputes

A failure to perform an obligation required by an enforceable contract without a legally sufficient excuse. The available remedy depends on the promise, performance, resulting harm, and applicable law. Some breaches justify damages; a sufficiently material breach may also affect the other party's duty to continue performing.

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Ownership & Governance

An agreement establishing when and how an ownership interest may or must be purchased. It may address death, disability, departure, misconduct, or deadlock, together with valuation, payment, and funding. It can be a standalone agreement or part of an operating or shareholder agreement.

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Ownership & Governance

A transaction in which an owner sells all or part of their interest to another owner, the company, or a third party. Price, payment, releases, guarantees, and continuing obligations must be addressed. A desire to leave a business does not automatically create a right to demand a buyout.

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Formation & Liability

A corporation taxed under Subchapter C of the Internal Revenue Code. It generally pays federal income tax on its taxable income, and shareholders may also owe tax on dividends. The corporate structure supports stock ownership and board governance; tax classification and state-law entity form remain distinct concepts.

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Equity & Capital

Short for capitalization table: a record of a company's ownership and securities, such as shares, options, and convertible instruments. A cap table can show current ownership and modeled ownership after financing events. Whether percentages include unissued options or convertible securities depends on the assumptions used.

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Ownership & Governance

Money, property, services, or another permitted contribution supplied or promised to a company in exchange for an ownership interest or to satisfy an ownership obligation. The governing agreement should identify its value and treatment. A contribution is different from a loan, which ordinarily creates a repayment obligation.

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Formation & Liability

The document filed with the Texas Secretary of State to create an LLC or certain other entities. It identifies required organizational information and may contain provisions affecting governance. Filing the certificate establishes the entity; it does not replace a company agreement governing the owners' relationship.

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Equity & Capital

Property pledged to secure an obligation. A creditor with an enforceable security interest or lien may have rights against that property if the debtor defaults. Collateral provides a source of repayment but does not necessarily limit the debt or eliminate a separate personal guarantee.

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Commercial Leases

A contract giving a business the right to occupy property for permitted business purposes in exchange for rent and other obligations. It allocates responsibilities such as repairs, operating expenses, insurance, use, and default remedies. Many protections that apply to residential tenants do not apply in the same way to commercial leases.

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Formation & Liability

Mixing money or assets that should be kept separately identified, such as an owner's personal funds and company funds. It can obscure ownership, complicate taxes, and support claims concerning misuse of money. Commingling alone does not automatically make an owner liable for every Texas LLC debt.

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Contracts

An agreement restricting the use or disclosure of specified information, often called an NDA. It should identify protected information, permitted uses, exclusions, authorized recipients, and duration. Confidentiality obligations protect information but do not, by themselves, transfer ownership of intellectual property.

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Contracts

The process by which parties create an enforceable agreement. It generally involves an offer, acceptance, sufficiently definite terms, intent to be bound, and consideration, subject to applicable law. Some transactions also require a sufficient signed writing; a formal-looking document alone does not establish every requirement.

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Contracts

A change to an existing agreement's terms, such as scope, price, timing, or responsibilities. Its validity depends on applicable law and any required approval or form. Informal conduct or communications may create disputes over modification or waiver even when the contract calls for signed written amendments.

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Contracts

The continuation of an agreement for an additional period under its terms or a new agreement. Renewal may be automatic, optional, or subject to negotiation. Notice deadlines, pricing adjustments, and cancellation requirements determine whether a party can prevent renewal or change the terms of the next period.

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Contracts

The ending of a contractual relationship under a contractual right, mutual agreement, or applicable law. It generally stops specified future performance but may leave accrued payments, claims, and surviving obligations in place. Termination is different from rescission, which seeks to unwind the transaction.

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Intellectual Property

Legal protection for original works of authorship fixed in a tangible medium, including qualifying software, text, images, and music. It protects expression rather than ideas, methods, or systems themselves. Ownership, permission to use a copy, and registration are separate issues that can affect a company's rights.

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Contracts

A period allowed to correct a default before specified remedies may be exercised. A contract may require notice describing the problem and a particular delivery method before the period starts. Having a valid complaint does not necessarily permit immediate termination when an applicable cure process remains unfinished.

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Contracts

A document identifying the products or services a particular customer purchases and the associated commercial terms. It commonly states pricing, quantities, billing, service period, and negotiated exceptions. When used with an MSA, it should identify the governing agreement and explain how conflicting terms are resolved.

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Ownership & Governance

A failure to obtain the approval needed for a company decision because the required voters cannot agree. A 50/50 ownership split can create deadlock when neither side can secure the necessary vote. Operational disagreements are not always legal deadlocks, and resolution depends on the governing agreement and available remedies.

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Business Disputes

A written communication asserting a claim and requesting payment, performance, or another response by a stated deadline. It can document the dispute and satisfy some contractual or statutory prerequisites when properly prepared. Sending a demand does not establish that the claim is valid or automatically stop a limitations period.

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Equity & Capital

A reduction in an owner's percentage interest or other measured economic position, often when additional equity is issued or convertible instruments convert. A lower percentage does not necessarily mean a lower dollar value. The calculation depends on the securities, option pool, financing terms, and capitalization assumptions.

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Business Disputes

A direct claim addresses an injury to the claimant personally. A derivative claim is brought on behalf of a company for an injury belonging to that company, with recovery generally belonging to it. The distinction affects who may sue, the required procedures, and who receives the recovery.

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Formation & Liability

An entity treated as not separate from its owner for a particular tax purpose. A single-member LLC is commonly disregarded for federal income tax unless it elects corporate treatment, but separate treatment can apply for employment and certain excise taxes. Tax disregard does not itself eliminate state-law liability protection.

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Ownership & Governance

A transfer of money or property by a company to an owner in their capacity as an owner. The right to receive distributions and the authority to approve them depend on governing documents and law. Distributions are distinct from wages, expense reimbursements, and repayment of owner loans.

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Equity & Capital

The investigation of a business, asset, or transaction before a decision such as an investment or acquisition. It can cover ownership, finances, contracts, IP, employment, disputes, and compliance. Its scope depends on the deal; producing documents is only part of demonstrating that the underlying rights and obligations are sound.

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Contracts

An electronic sound, symbol, or process associated with a record and adopted with intent to sign it. A typed name or acceptance click may qualify in the right circumstances. Intent, attribution, consent to transact electronically, and transaction-specific legal requirements still matter; electronic format does not cure missing contract terms.

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People & Work

An agreement defining terms of an employment relationship, which may address duties, pay, incentives, confidentiality, IP, termination, and continuing obligations. It does not necessarily guarantee employment for a fixed term. Its provisions must be evaluated under applicable employment law, including any limits on restrictive covenants.

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Formation & Liability

A legally authorized transaction changing a business from one entity form to another, such as an LLC to a corporation. It can affect governance, ownership documentation, taxes, and contractual consents. A state-law conversion is different from merely electing a different federal tax classification.

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Ownership & Governance

A duty arising from a relationship of trust or a legally recognized role, which may require loyalty, care, or other obligations. Its existence, beneficiary, and scope depend on the role, documents, relationship, and law. Texas LLC co-members do not automatically owe each other every fiduciary duty merely because they own together.

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Contracts

A contract provision allocating the consequences of specified events outside the affected party's control. Depending on its wording, it may excuse, suspend, or permit termination of performance. An unexpected event or increased expense does not automatically qualify; causation, notice, exclusions, and mitigation requirements can determine the result.

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Ownership & Governance

An agreement defining the relationship among a business's founders, including contributions, roles, ownership, vesting, IP, decision-making, and departures. Its terms should coordinate with the company's governing documents and equity instruments. A founder title or informal understanding does not, by itself, resolve ownership or authority.

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Business Counsel

An attorney or legal team engaged to provide ongoing, integrated company counsel for part of the time or capacity of a full-time legal department. The arrangement can cover contracts, governance, people, transactions, and legal risk. Its scope, availability, fees, and relationship to specialist counsel depend on the engagement.

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Business Disputes

Fraud that causes a person to enter an agreement, typically through a qualifying misrepresentation, intended and justified reliance, and resulting injury. The elements depend on applicable law. A later failure to perform is not, by itself, proof that the party fraudulently induced the contract.

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Contracts

The law selected to interpret an agreement and resolve specified legal questions. A governing-law clause is different from a clause choosing the court, location, or dispute process. Mandatory laws and conflict-of-laws rules can limit how far the parties' selection controls.

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Intellectual Property

A transfer of ownership of identified intellectual property rights from one person or entity to another. It differs from a license, which grants permission to use rights without necessarily transferring ownership. The agreement should identify the rights, exclusions, effective transfer language, and any required further documentation.

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Contracts

Two drafting tools that help multiple contract documents work together. Incorporation by reference makes an identified document part of the agreement. An order-of-precedence clause establishes which terms control if the documents conflict. Both require clear language suited to the particular transaction.

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Contracts

An obligation to cover specified losses, liabilities, or claims suffered by another party. A clause may also address defense obligations, procedures, and settlement control, but those duties should not be assumed from the label alone. Scope and enforceability depend on wording, context, and applicable law.

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People & Work

A person or business engaged to provide services while operating independently, rather than as an employee under the applicable legal test. A contract label, invoice, or tax form alone does not establish that status. Tax, unemployment, wage, and other laws may apply different classification standards.

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Ownership & Governance

Rights to examine specified company books, records, or information under statute or governing documents. In a Texas LLC, the requesting person's status, stated purpose, scope, and required procedures can matter. Inspection rights provide access to information; they do not necessarily give the requester authority to manage the business.

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Ownership & Governance

A court-ordered process to conclude a company's affairs, address obligations, and distribute remaining assets before termination. Texas law permits it for LLCs on specified grounds. It can threaten the entire business and is different from simply removing one owner or ordering an ordinary negotiated buyout.

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Commercial Leases

A transfer of a tenant's lease interest to another party. Consent requirements and continuing liability depend on the lease and law. An assignment does not necessarily release the original tenant or a guarantor; an express release may be needed to end those obligations.

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Commercial Leases

An agreement or legally effective arrangement by which a tenant gives up possession and the landlord accepts the ending of the tenancy. A negotiated surrender should specify payments, restoration, deposits, claims, and guarantee treatment. Returning keys alone does not necessarily end all lease liability.

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Contracts

A provision restricting specified financial exposure or categories of damages under a contract. It may establish a monetary cap, exclude certain losses, and create exceptions. It does not automatically eliminate liability; wording, interaction with indemnities, statutory rules, and enforceability limits must be considered.

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Formation & Liability

A state-law business entity combining a separate legal identity and general owner liability protection with flexible governance. Its owners are members, and their rights are governed by applicable law and the company agreement. An LLC's federal tax treatment can vary; the entity form alone does not determine it.

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Contracts

An amount or formula agreed in advance to compensate for a specified breach. Courts may refuse to enforce a provision that operates as an impermissible penalty rather than a valid damages estimate. Calling a fee liquidated damages does not establish its enforceability.

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Contracts

A contract setting the general legal and commercial terms for a services relationship, often across multiple projects or purchases. Separate SOWs or order forms can define individual engagements. The documents should identify how they fit together and which terms control if they conflict.

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Business Disputes

A facilitated negotiation in which a neutral mediator helps parties seek a voluntary resolution. The mediator generally does not decide the dispute or impose an outcome. A resulting settlement becomes binding through the parties' agreement and applicable legal requirements, rather than merely because mediation occurred.

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Ownership & Governance

The involuntary ending of a person's status as an LLC member under an authorized mechanism. In Texas, the default prohibition and any modifications in the company agreement require close attention. Removing someone from employment or management does not, by itself, eliminate ownership or create a right to confiscate their interest.

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Ownership & Governance

An LLC member's departure from membership under applicable law and the company agreement. It is different from quitting a job or ceasing daily work. A member may lack a unilateral withdrawal right, and withdrawal does not automatically require the company or other owners to purchase the interest.

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Ownership & Governance

Two ways to allocate an LLC’s governing authority. In a member-managed LLC, the members govern; in a manager-managed LLC, designated managers govern and may or may not be owners. The governing documents determine delegated responsibilities and which decisions still require owner approval.

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Ownership & Governance

An owner's interest in an LLC, including the economic rights associated with ownership. In Texas, the transferable membership interest is distinguished from the member's right to participate in management. The company agreement and applicable law determine voting, distributions, transfer restrictions, and admission rights.

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Intellectual Property

Terms granting permissions to use, copy, modify, or distribute software made available under an open-source license. Conditions differ and may include notices, attribution, or source-disclosure obligations in particular circumstances. Open source is not the same as public domain, and using a component does not transfer its ownership to the business.

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Ownership & Governance

An operating agreement defines how an LLC is owned and operated. It sets the rules for management, voting, contributions, distributions, ownership transfers, and what happens when an owner leaves.

In Texas, it is called a company agreement. It works alongside the certificate of formation and applicable law.

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Equity & Capital

Equity reserved for option grants or other incentive awards, usually for employees, advisors, or other contributors. A reserved pool is not necessarily currently issued stock. Its size and treatment in a financing can affect fully diluted ownership calculations and determine who bears dilution from an increase.

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Contracts

The agreed rules governing amounts owed, billing, due dates, deposits, expenses, late charges, and related payment procedures. They should coordinate with acceptance, suspension, and dispute provisions. Adding a new fee to an invoice does not necessarily make it enforceable if the customer never agreed to it.

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Formation & Liability

A separate promise by an individual to answer for specified obligations of a business or another borrower. If the covered obligation is unpaid, the creditor may pursue the guarantor under its terms. Forming an LLC does not remove this voluntarily assumed liability, and selling or closing the business does not automatically release it.

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Formation & Liability

A legal basis for disregarding an entity's liability boundary and holding an owner responsible for an obligation otherwise belonging to the entity. The requirements vary by jurisdiction and claim. Texas places significant statutory limits on contract-related veil piercing; poor records or ownership control alone do not automatically satisfy them.

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Equity & Capital

An equity financing in which the parties establish a share price or valuation framework for issuing stock. It often involves preferred stock and can trigger conversion of outstanding SAFEs or other convertible securities. The ownership result depends on both new investment and the treatment of existing instruments and the option pool.

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Equity & Capital

Contractual rights allowing an investor to participate in a later financing to preserve a specified proportional ownership position, subject to the agreement. They are usually an opportunity to invest additional money, not free additional shares. Eligibility, calculation, exclusions, and waiver provisions determine the right's actual reach.

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Ownership & Governance

A transaction involving a company and someone connected to it, such as an owner, manager, affiliate, or family member. It can create conflicts of interest even when the deal is commercially reasonable. Disclosure, approval procedures, fairness, and governing-document requirements help determine whether the transaction was authorized and defensible.

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Contracts

An agreement relinquishing specified claims or obligations. Its scope depends on the language, parties, timing, and law, including any claims that cannot lawfully be waived. A release between departing owners does not bind a landlord or lender that did not agree to release its own rights.

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Contracts

A remedy or agreement seeking to unwind a transaction and restore the parties, as far as practicable, to their prior positions. It differs from ending future performance through termination. Grounds, restoration requirements, timing, and competing remedies depend on the law and facts; regret about a deal is not enough.

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Ownership & Governance

Decisions withheld from ordinary management authority and made subject to specified owner, board, or investor approval. Examples include major borrowing, new equity, related-party deals, or a sale of the business. The governing agreement should identify the matters and voting thresholds clearly to avoid accidental vetoes or unauthorized action.

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Contracts

A contractual restriction on specified conduct, often involving competition, solicitation, confidentiality, or use of business information. Different restrictions have different enforceability standards, and jurisdiction matters. A clause should be assessed for its actual scope and legal requirements rather than assumed valid because an employee signed it.

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Ownership & Governance

A contractual opportunity to purchase an interest or asset on specified terms before its owner completes a sale to someone else. It commonly arises after a third-party offer, unlike a right of first offer. Notice, matching requirements, deadlines, and covered transfers depend on the agreement.

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Equity & Capital

Short for Simple Agreement for Future Equity: a financing contract providing specified rights to future equity or payments upon defined events. A standard YC SAFE generally has no interest or maturity date, unlike a conventional convertible note. Variants differ, and a SAFE investment ordinarily does not immediately issue stock.

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Contracts

The gradual expansion of requested work beyond the originally agreed scope without a corresponding agreed adjustment to price, resources, or timing. It is an operational problem that can become a contract dispute. Defined deliverables and consistent change-order procedures help distinguish included work from additional services.

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Formation & Liability

An LLC structure authorized to establish separate series associated with particular assets, members, or business activities. Under Texas law, qualifying series can have internal liability separation when statutory requirements are satisfied. The structure requires appropriate documents and records and may receive different treatment for taxes, financing, or operations in other states.

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Contracts

A project-specific document describing services, deliverables, responsibilities, milestones, acceptance, and related terms. It can operate under an MSA or serve within another contracting structure. A useful SOW explains both what is included and how changes are approved, rather than relying only on a general description of the project.

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Contracts

A law requiring certain agreements to be supported by a sufficient signed writing to be enforceable against the relevant party. Covered transactions and exceptions vary. Emails or other electronic records may sometimes satisfy the requirement, but an electronic format does not supply essential terms that were never agreed.

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Business Disputes

A legal deadline for filing a particular type of claim, generally measured from an accrual event subject to applicable rules and exceptions. The correct period depends on the claim and transaction. Sending demands or negotiating does not ordinarily suspend the deadline without a valid legal basis or agreement.

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Commercial Leases

An arrangement in which a tenant grants another occupant rights to use all or part of leased premises while retaining an interest under the original lease. The original tenant generally remains obligated to the landlord unless released. Consent, permitted use, duration, and default consequences depend on the lease and sublease.

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Formation & Liability

A Texas privilege tax applying to taxable entities formed in Texas or doing business in the state, subject to exemptions and other rules. Liability and reporting depend on the entity and applicable requirements. Owing no tax does not necessarily eliminate required information reports or the need to maintain the account.

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Ownership & Governance

Rules limiting when, how, or to whom an ownership interest or contractual right may be transferred. They may require consent, create purchase rights, or prohibit specified transactions. An attempted transfer's effect depends on the wording and law; economic transfer rights and admission to management may be treated separately.

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Commercial Leases

A commercial lease commonly requiring the tenant to pay allocated property taxes, building insurance, and maintenance expenses in addition to base rent. The label does not establish the precise allocation of costs. The actual lease determines exclusions, repair responsibilities, capital costs, caps, and reimbursement procedures.

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Equity & Capital

A contractual ceiling used to calculate a convertible instrument's conversion price under specified circumstances. It can give an early investor a more favorable conversion price when a later financing valuation exceeds the cap. It is not necessarily the company's present market value or a guarantee of a fixed ultimate ownership percentage.

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Equity & Capital

The process by which an equity award or other benefit becomes earned or no longer subject to specified forfeiture or repurchase conditions. Founder stock can be issued upfront while remaining subject to a repurchase right that lapses over time. The schedule, service requirements, departures, and acceleration terms determine what the person retains.

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Equity & Capital

A contractual provision causing equity to vest sooner after specified events. Single-trigger acceleration requires one qualifying event; double-trigger acceleration requires two, commonly a change of control and a qualifying employment departure. The documents determine the events, timing, and portion of the award affected.

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Veteran Businesses

The SBA's Veteran Small Business Certification program for eligible VOSBs and SDVOSBs. Certification concerns federal program eligibility, including qualifying ownership and control, and is distinct from forming a veteran-owned company or receiving Texas benefits. Certification can support access to specified contracting opportunities but does not guarantee an award.

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Ownership & Governance

Rights to approve, reject, or otherwise participate in specified company decisions. They may be allocated by person, ownership, class, or another agreed formula and need not match economic percentages. Management authority and voting rights are also distinct, so an owner may have approval rights without directing daily operations.

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Intellectual Property

A copyright category in which the employer or qualifying commissioning party is treated as the legal author. It can apply to employee work within the scope of employment and certain specially commissioned categories with the required signed agreement. Hiring and paying an independent developer does not automatically make all software work made for hire.

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People & Work

Treating a worker as an independent contractor or another category when the applicable law treats the person differently. Consequences can include tax, unemployment, wage, benefit, or other liabilities. Different laws use different tests, so a contract label or result under one statute does not settle classification for every purpose.

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