Controlling Interest generally means voting rights held by 1 person that constitute more than the necessary votes to pass most actions in a Company. Usually a Controlling Interest means more than 50% of the voting interests in a Company (at […]
A Cliff is a term used to describe the length of time it takes for stock options or other securities on a vesting schedule to partially or fully vest.
A Corporate Resolution is a document that sets forth the actions of a corporation’s board or shareholders. In the context of an LLC, it may simply be called a “resolution.” A certain level of consent is required for a resolution […]
Corporate Governance is the manner in which an entity is governed and regulated. The term is used across all entity types – corporations, LLCs, and partnerships. Corporate governance documents include the certificate of formation/incorporation and bylaws for a corporation, and […]
A Convertible Note is short-term debt that converts into equity, typically in conjunction with a financing round. By using a convertible note, the investor would be loaning money to a startup, and instead of a return in the form of […]
Constructive knowledge is knowledge that an individual should have know by virtue of his/her/its position in a Company and/or after due inquiry of others in the Company. Constructive knowledge is a definition of knowledge frequently used in an Asset Purchase […]
Consideration is the benefit that both parties get in a contract. In order for a contract to be binding, there must be consideration on both sides. Consideration can be something you will do, or something you will not do.
A Company Record Book is also called a “Corporate Record Book”. Simply, it is a book that houses your important company documents. In the old days, companies kept a three-ring binder with this important information. Today, it’s common to house […]
A Company Agreement is an internal document for an LLC that provides the framework for how a limited liability company operates. According to the TBOC, “It governs the relations among members, managers, and officers of the company, assignees of membership […]
Common Stock is an equity ownership in a company. Common stock is typically issued before any other type of equity. Once a company has raised capital, common stock typically has junior liquidation and distribution rights to other stockholders and creditors.