One of the first decisions new partners face in pursuing a new business venture is what type of business entity to form. Options include forming formal business entities such as a corporation or limited liability company (LLC) which are registered with the State of California or forming a partnership. While…
The terms of commercial leases vary significantly depending on the type of commercial property being leased and the specific business goals of both landlords and tenants. “Option clauses,” also known as “renewal terms,” are provisions in a commercial lease agreement that allow a tenant to extend the term of the…
In general, shareholders are not permitted to sue corporations on their own behalf seeking damages for themselves. Instead, they are required to bring an action against wrongdoers (usually the officers and/or directors of the corporation) on behalf of the corporation in what is termed a “derivative” lawsuit. Where the corporation…
Indemnity clauses in general are designed to shift liability for claims asserted by third parties from one party to another. In the commercial lease context, tenants typically agree to both indemnify landlords and to defend and hold them harmless for all claims arising out of tenant’s operation of business on…
Landlords routinely request estoppel certificates from their tenants. Tenant estoppel certificates are signed statements requested by third parties (typically lenders or prospective purchasers of commercial real estate) in order to verify certain terms between the current tenant and landlord of the commercial real estate property, things that cannot be ascertained…
When forming a California limited liability company (LLC) or corporation, it is important that the owners determine whether any of the ownership interests in the company will be treated as a security. Under federal and state law, if one or more co-owners of a corporation (shareholders) or an LLC (members)…
Being served with a lawsuit can be one of the worst things that can happen to any business. The specter of long drawn out litigation causes immediate anxiety and young and inexperienced owners worry that their business may collapse. In short, panic sets in and panic is the worst response. …
A Tenant Improvement Allowance (TIA) is a landlord incentive designed to assist new tenants with the build-out of their space. Build-outs are improvements to leased space to make the space usable for a particular tenant’s needs. Whether or not a landlord will offer a TIA and how much the landlord…
Litigation can be divided into three relatively distinct phases: the pleading phase , the discovery phase and trial. While the distinction can sometimes be blurred, there is no doubt about these three significant areas of litigation. The average San Diegan has little understanding of the pleading phase. It involves the…
Most commercial leases in California are triple net leases. With a triple net lease, tenants contribute to the payment of the landlord’s operating expenses, such as building insurance, taxes, repairs, maintenance, and utilities in addition to base rent. Typically, these expenses are referred to as Common Area Maintenance Expenses (CAMs).…