BOE Tax Clearances

When a business that sells or leases goods at retail owes sales taxes to the California Board of Equalization (BOE), the buyer of the business can be responsible for paying the BOE the amount owing if the seller does not … Continue reading

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FTB Tax Clearance Certificates

When a business is required to deduct and withhold taxes and remit them to the Franchise Tax Board (FTB), a successor to the business can be responsible for paying the amount owing to the FTB  if the business does not pay … Continue reading

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Buyer Can Access Pre-Acquisition Attorney-Client Communications

The Delaware Court of Chancery has held that pre-merger communications — including those relating to the negotiation of the merger itself — pass to the surviving corporation in the merger, absent a contractual provision to the contrary. Thus, the buyer … Continue reading

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Webinar Presentation on Drafting Buy-Sell Agreements

On November 14, 2104, I conducted a webinar on “Drafting Buy-Sell Agreements–What  the Forms Books Won’t Tell You.” The program was jointly sponsored by the Corporations Committee and the Partnerships and LLC Committee of the Business Law Section of the … Continue reading

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Corporate Spin-Off Does Not Transfer Insurance Coverage

In Fluor Corp. v. Superior Court (2012), the court held that an insurance policy’s clause requiring the insurer’s consent to an assignment of rights under the policy was valid. Fluor Corporation (here called Fluor-1) was formed in 1924 Fluor-2 was … Continue reading

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Springing Covenant Not to Compete Not Enforceable

In Fillpoint, LLC v. Maas (2012), a court struck down a covenant not to compete that would take effect only upon termination of employment where the covenant was in addition to a covenant not to compete that was given in … Continue reading

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Shareholder Loses Standing to Maintain Derivative Action After Merger

In Villari v. Mozilo (2012) 208 Cal. App. 4th 1470, the court held that under Delaware law a shareholder who was a plaintiff in a shareholder derivative action lost standing to maintain that action once a merger resulted in the … Continue reading

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“Good Standing” Certificates

The California Franchise Tax Board (FTB) has recently announced that a report of the tax status of a business entity (limited liability company (LLC) or corporation) can be obtained online from the FTB for free.  The report is officially referred … Continue reading

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Bulk Sales Law: A Possible Trap for the Unwary Buyer of a Business

Buyers of businesses should be aware that California, like some other states, has a “bulk sales” law. Its official name is Uniform Commercial Code—Bulk Sales. The bulk sales act is designed to protect the creditors of a business by giving … Continue reading

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Zalkind v. Ceradyne, Inc.

In Zalkind v. Ceradyne, Inc. (2011) 194 Cal. App. 4th 1010, Ceradyne, Inc. (Ceradyne), entered into an asset purchase agreement (asset purchase agreement) with Stanley and Elizabeth Zalkind (the Zalkinds) and Quest Technology, LP (Quest), a limited partnership owned by … Continue reading

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