New Corporate Governance Subscription Service

Are you a founder, officer, or major shareholder of a c-corporation? If so, keep reading…

Corporate governance – nobody likes doing it, but it’s essential to maintaining your corporation’s liability shield. Also, if neglected or done incorrectly, it can be expensive to clean up, and can hold up important, time-critical transactions.

That’s why we are launching a new Corporate Governance Subscription Service for c-corporations. For a monthly subscription fee of $129, we will assist you with various corporate governance tasks, enabling you to focus on running your business.

What’s included:

  • Annual shareholders consent action, electing board of directors for upcoming year, and ratifying all actions taken by board of directors and officers
  • Annual board of directors consent action, electing officers for upcoming year
  • Unlimited board resolutions throughout the year, to authorize a variety of actions – issuing stock and stock options, entering into contracts, etc.
  • Assistance with filing annual report and other periodic filing and reporting obligations
  • Reminders when annual meetings and filings are due

How does it work?

  • Subscription fee is $129/month.
  • Each month we will bill your credit card for the monthly subscription fee.
  • Three-month minimum is required. After that, you can cancel at any time, and services will terminate at the end of that month.
  • All subscriptions are subject to our conflicts check, to ensure no conflicts of interest

Contact us now to sign up, and sleep easier knowing that we are taking care of this tedious but important task for you.

 

This is an attorney advertisement.

 

 

Vermont Passes Strictest Subscription Renewal Law

Companies that offer subscriptions that renew automatically now have to pay attention to tiny Vermont, which just passed the strictest automatic renewal law in the country. Several states, including California, have laws governing subscription renewals that require sellers to clearly and conspicuously present the terms of the offer, get express consent from the consumer, provide an easy method to cancel, and send a reminder prior to the start of a renewal term. Vermont’s law adds two new twists, however. First, the auto-renewal provision must be presented in boldface type. Second, consumers have to take two actions to accept the renewal offer.

California, which prior to passage of the Vermont law had perhaps the most restrictive law on the subject, gives companies a great deal of latitude in deciding how to meet the “clear and conspicuous” standard – it can be boldface, larger type face than surrounding text, contrasting color or font, or text that is set off by surrounding text by symbols or other marks. Vermont’s law will give no such latitude. If the renewal plan text is larger font, contrasting color, and surrounded by symbols, but is not in boldface, it will not comply.

The two-action consent requirement means that in both online and written offers, the company must get a consumer’s consent through both:

  1. A check box, signature, or other similar method that shows consent specifically to the auto-renewal terms, and
  2. A separate consent (like a “Submit” or “Purchase Now” button) to the overall order.

The Vermont law covers both business-to-consumer and business-to-business subscriptions, although there is an exemption for insurance contracts and contracts between a consumer and a financial institution or credit union. By including B2B, the Vermont law goes well beyond California’s law, which only protects consumers. This means a wide variety of SaaS businesses need to look at their subscription and renewal practices, if they are doing business with Vermont companies.

Vermont’s new law will take effect on July 1, 2019, and only applies to contracts with an initial term of one year or more, and subsequent terms that are longer than one month. So, if a company offers a product or service with an initial term of less than a year, and the term renews on a monthly, quarterly, or semi-annual basis, the company is not covered. Similarly, companies that offer simple monthly subscriptions, like many streaming services and subscription boxes, are not covered. Many magazine subscriptions have an initial term of one year, and typically renew for terms of a year, so these most likely will be covered by the new law.

 

California’s Subscription Renewal Law About To Change

On July 1, 2018, California’s subscription auto-renewal law is about to change in a couple of important ways. This law applies to e-commerce vendors who sell to consumers on a subscription basis, where the subscription renews automatically. For example, companies that offer subscription box services are generally subject to this law. Under the law as it currently stands, vendors must disclose the terms of the automatic renewal policy in a clear and conspicuous manner at the time of the original purchase, get the consumer’s affirmative consent before charging the consumer, and explain how to cancel the subscription.

Beginning July 1, vendors will have to allow online cancellation if the subscription was originally commenced online. Such vendors cannot require that their customers use phone or snail-mail to cancel. Also, if the subscription offer includes a free gift, trial subscription, or promotional pricing, vendors must notify consumers how to cancel before they are charged (or before the promotional pricing expires and they are charged full price). Vendors must explain the price to be charged when the promotion or free trial ends. If the initial offer is at a promotional price that will increase later, the vendor must obtain the consumer’s consent to the non-discounted price prior to billing.

Auto-renewing subscriptions have been fertile ground for California class action attorneys, who have made a cottage industry out of shaking down vendors that fail to comply with the state law. Consequently, it’s important for any company whose business model is based on consumer subscriptions that renew automatically to update their terms of service and selling processes before the new law takes effect. It doesn’t matter if the company isn’t based in California, either – the law applies if the consumer is a resident of California. Finally, keep in mind that more than half of US states have a law dealing with auto-renewing subscriptions.

California Adopts New Independent Contractor Test

In a recent case, the California Supreme Court adopted a new standard for determining when a worker is an independent contractor, and when a worker is an employee. This is a major departure from how workers have been classified in the past, and will have far-reaching effects on employment and the gig economy.

The case, Dynamex Operations West, Inc. vs. Superior Court, involved delivery drivers for a parcel delivery company. Under the new, 3-factor “ABC” test adopted by the Court, a worker is presumed to be an employee, and will only be considered an independent contractor if:

1. The worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract and in fact;
2. The worker is performing work that is outside the usual course of the hirer’s business; and
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work being performed.

All three factors must be satisfied, or the worker will be re-classified as an employee. In adopting the new ABC test, the Court abandoned the traditional “right to control” test, which looked at numerous indicators of control, none of which was dispositive.

To see how this new test will play out, let’s look at an example of a software company that engages software developers, but wants to classify them as contractors. The company may tell the developer that it needs software in place to protect data security from hackers. The company may not give the developer any directions as to how to write the code for that software, and may not require the developer to do the work onsite, which may satisfy the first part of the ABC test. Also, the developer may be doing a lot of freelancing in the area of data security for different companies, satisfying the third part of the test. The problem is the second part. If the company is a software company, then software development could very likely be considered within the usual course of its business. The same analysis might apply to a package delivery company that wants to classify its delivery persons as contractors. On the other hand, a retail clothing chain that hires a software developer to work on its customer database may have a better chance of classifying that developer as a contractor.

Consequently, companies in California that use contractors need to take a hard look at how the relationship is set up. It is quite likely that under the new ABC test, many of those contractors will need to be reclassified as employees.

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Trump Makes Commitment to Protect State-Legal Cannabis Programs

Senator Cory Gardner (R-Colorado) released a statement on April 13 that he has obtained a commitment from President Trump that Department of Justice will not target Colorado’s (and presumably other states’) legal recreational marijuana industry. As you may recall, Attorney General Jeff Sessions issued a memorandum in January that effectively rescinded the Cole Memorandum, and gave individual US Attorneys the discretion to pursue state-legalized recreational marijuana businesses. Pursuant to the Rohrabacher-Blumenauer Amendment, the federal government is already restricted from devoting resources to prosecute medical marijuana businesses that are in compliance with state law. In response, Senator Gardner put a senatorial hold on approximately 20 of Trump’s Justice Department nominees, freezing the approval process for these nominees.

According to Senator Gardner, in a phone call last week President Trump assured Gardner that the Colorado recreational marijuana industry would not be targeted. Based on this assurance, Senator Gardner is allowing the DOJ nominees to move forward. Also, Senator Gardner stated that “President Trump has assured me that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all.” Senator Gardner indicated that he is working with colleagues on a bipartisan legislative solution to embody this notion of federal non-interference with states that have legalized marijuana.

Whether Trump will follow through with his assurances remains to be seen, as he has a pattern for reversing positions and commitments. Also, this commitment may be nothing more than Trump expressing his continuing displeasure with Attorney General Sessions.