Corporate and Commercial Blogs

What Companies Need to Know to Avoid Civil Penalties
In its mission to assist businesses comply with multiple laws, regulations and guidelines, Cea Legal analyzed the requirements of the recently enacted New York City’s pay transparency law. The new law makes it illegal for a NYC-based company – with at least four employees or independent contractors - to advertise a job opening without including information regarding the minimum and the maximum salary for the position.

Newly formed companies often need fresh capital to start-up their operations. There is no one-size-fits-all approach when it comes to how to fund the business. We counsel founders from the outset and lead them to choose the right investors and, more importantly, the most valuable financing tools available under the specific circumstances.

The most common early-stage financing methods are convertible notes, simple agreements for future equity (SAFEs), preferred stock agreements.

The recently established Office of Cannabis Management published the criteria to apply for Conditional Adult-Use Retail Dispensary (CAURD) Licenses, thus opening the doors to the first cannabis legal sales in New York in the next few months. CAURD Licenses will be limited to “justice-involved” individuals, who is someone who was convicted, or had a parent/child/spouse who was convicted, of a marihuana-related offense in New York State before March 31, 2021.

A “down-round” occurs when a company raises new capital according to a valuation lower than that had been used in the previous financing. While this might be seen as a last resort, it becomes less unusual and actually useful in a turbulent economic landscape like the current one. In fact, when a “down-round” is justified by factors that are outside of a company’s control, such as the current concurrence of a pandemic-induced crisis and inflation shocks, it should not affect the reputation of the company. On the other hand, as long as the fundamentals of the company are positive, it is a great opportunity for a clean restart when the economy bounces back.

Mitigating Contractual Risks: Representation And Warranties

Representations and Warranties are legal devices to minimize the inherent risks involved in any business relationship

Entrepreneurs are often excited to partner with someone else to launch a new product or services, as long as the new business relationship does not bring new risks and issues. To this effect, at Cea Legal, we are always asked to do everything possible to reduce new unforeseen risks.