Selections: Letters for Small Business Lawyers

Vol. 1, No. 2

Jean L. Batman founded Legal Venture Counsel, Inc. in 2004 to provide outside general counsel services to investors, entrepreneurs, and small businesses. Prior to forming Legal Venture Counsel, Ms. Batman was a Partner in the San Francisco offices of Duane Morris LLP, one of the country’s 100 largest law firms. As outside general counsel to a variety of companies and individuals, Ms. Batman provides business and financial legal services to privately held entities operating in a broad range of industries including real estate development, financial and professional services, manufacturing, software, retail, biotechnology/specialty pharmaceutical, and high technology.

 

From the book Letters for Small Business Lawyers

 

Copyright Protection for Software

 

 

{Date}

 

{Name}

{Company Name}

{Address}

{City, State, Zip Code}

 

RE: Copyright Protection for Software

 

Dear {Salutation}:

 

Pursuant to our recent telephone conversation, here is some initial information about obtaining a registered copyright for your computer software product.

 

Copyright protection extends to all of the copyrightable expression embodied in the computer program. It is best to register the copyright within three months of first publication (and prior to any infringement) so that you will be entitled to statutory damages in the case of infringement.

 

Copyright protection is not available for ideas, program logic, algorithms, systems, methods, concepts, or layouts. Therefore, you may also wish to consider obtaining one or more patents to fully protect the intellectual property reflected in the program. Please note that a patent application must be filed within one year of publication of the software or it will be statutorily barred.

 

To complete an application for copyright registration, I will need to know the year of creation and the exact date of first publication of the program. The filing fee is nominal, so most of the cost is in the preparation of the application and materials to be submitted for registration.

 

In general, copies of all or a portion of the program source code must be submitted with the application for registration. To determine how much of the program source code must be submitted and the appropriate format, you need to decide whether the program contains any trade secrets.

 

If the program does not contain trade secrets, we will submit one copy of the identifying portions of the program (i.e., the first 25 and last 25 pages of source code) in human-readable form, together with the page or equivalent unit containing the copyright notice, if any. If a published user’s manual or other printed documentation accompanies the computer program, we will include a copy of the user’s manual along with the identifying portions of the program. In addition, if the program is embodied in a CD-ROM, ordinarily the entire CD-ROM package must be deposited, including a complete copy of any accompanying operating software and instructional manual.

 

If the computer program does contain trade secrets, the requirements are similar, but the registrant may block out those portions of the code that contain trade secrets. There are some limitations here, so if this pertains to your product, we should discuss this further.

 

If you are also seeking to protect screen displays (i.e., the visual component of the program), we will reference them in the application and submit identifying material for the screens.

 

I hope this answers some of your initial questions. I look forward to further discussion with you.

 

Very truly,

FIRM NAME

Lawyer Name

 

 

Doing Business in More Than One State

 

{Date}

 

{Name}

{Company Name}

{Address}

{City, State, Zip Code}

 

RE: Doing Business in More Than One State

 

Dear {Salutation}:

 

All states require foreign entities (i.e., ones not organized in that state) to qualify before doing business in their state. Qualification typically consists of a filing with the Secretary of State’s Office, payment of a fee, and appointment of a resident agent for service of process. Thereafter, you can expect filings and fees due annually, as well as tax obligations specific to each state in which COMPANY operates.

 

“Doing business” is more often defined by the exceptions than by particular acts that constitute doing business in a particular state. However, if COMPANY elects to open an office in another state, as you have indicated it may, it will be required to qualify in that state. Failure to qualify may result in financial penalties as well as the inability to bring suit in the courts of the state with respect to acts and transactions in the state during the period of the violation.

 

Please let me know when COMPANY begins operating in another state so I can assist you in qualifying to do business in the other jurisdiction. In the meantime, please do not hesitate to call me with any questions with regard to the above.

 

Very truly,

FIRM NAME

Lawyer Name

 

 

Letter to Corporation With Reminder Re: Corporate Governance Matters

 

{Date}

 

{Name}

{Company Name}

{Address}

{City, State, Zip Code}

 

RE: Corporate Compliance

 

Dear {Salutation}:

 

As you know, the regular observance of corporate formalities is an important aspect of maintaining the protections and advantages of being incorporated, not the least of which is the protection of shareholders against personal liability for the financial obligations of the corporation.

 

Three of the most important areas of corporate formalities are shareholder decision making, director decision making, and separation of corporate assets from personal assets. Federal and state tax returns, employment tax returns, and Statements of Information (California), Annual Lists (Nevada), Annual Reports (Delaware), and similar filings are also required, depending on where the corporation is incorporated and qualified to do business.

 

The shareholders should take action to elect the board of directors of the corporation annually. In addition, certain specified fundamental changes in the corporation require the consent or approval of the shareholders, including, but not limited to:

 

1. Amendment of the Articles of Incorporation.

2. Sale of all or substantially all of the assets of the corporation.

3. Merger or consolidation of the corporation with or into any other corporation.

4. Winding up and dissolution of the corporation.

 

Matters of more general operating policy should be considered and authorized by the company’s board of directors. Although there is no statutory requirement with respect to how frequently the board of directors should act, it is typical that the board meets quarterly and calls special meetings in which action is required before the next regular meeting. Matters appropriate for director action include the following:

 

1. Annual appointment of officers, setting of salaries, and declaration of bonuses.

2. Appointment of board committees, if any.

3. Corporate borrowing and the giving of security in connection therewith.

4. Contracts for the acquisition or lease of significant assets or services or the disposition of assets, or for the rendition of services outside the ordinary course of the business of the corporation.

5. Policy decisions with respect to the corporation’s operating budget.

6. The adoption of pension, profit-sharing, bonus, and other employee benefit plans.

7. The declaration of dividends or the redemption of shares.

8. Amendment of the bylaws.

9. Review of financial statements of the corporation.

10. Appointment of auditors, if any.

11. Any action that requires a shareholder vote.

12. The issuance and sale by the corporation of additional shares or the grant of options to purchase additional shares.

 

According to our records, the date of your last shareholder meeting and/or shareholder action by written consent was DATE. The date of your last director meeting and/or director action by written consent was DATE. The corporation is incorporated in STATE and is qualified to do business in the following additional states: __________________________________. The date of your last Statement of Information (or equivalent state filing in each state where the corporation is qualified to do business) was DATE. We do not have a record of what tax returns have been filed by the corporation.

 

Finally, we have drafts of the following documents in your corporate record book for which we have not received executed signature pages: ________________________

 

Please let us know if our records are out of date and/or if we can assist you in bringing your records current.

 

Very truly,

FIRM NAME

Lawyer Name

 

Enclosure

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Letters for Small Business Lawyers

 

Did you find this article helpful? Do you think more information like this would help you? More information is available. This material  is excerpted from Letters for Small Business Lawyers, 2011, by Jean L. Batman, published by the American Bar Association General Practice, Solo and Small Firm Division. Copyright © 2011 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. GP/Solo members can purchase this book at a discount.

 

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