Can investors in a company be sued?
Any private company can be sued by employees, shareholders, investors, customers, competitors, creditors, vendors and/or suppliers.
What are my rights as an investor?
Investors have the right to be charged a fair price for services provided. Investors have the right to select a stockbroker/advisor or change to another one for any reason. Investors have the right to move accounts to another firm whenever the investor wishes in a simple, efficient manner.
What is excessive dilution?
When a company issues additional shares of stock, it can reduce the value of existing investors’ shares and their proportional ownership of the company. This common problem is called dilution.
What is an anti-dilution clause?
Anti-dilution provisions are clauses built into convertible preferred stocks and some options to help shield investors from their investment potentially losing value. Anti-dilution provisions are also referred to as anti-dilution clauses, subscription rights, subscription privileges, or preemptive rights.
How much dilution makes sense for a founder?
There is no standard, but generally anything between or above 15\%-25\% ownership for the founders is considered a success. Nevertheless, the trade of ownership for capital is beneficial to both VCs and founders. Diluted ownership of a $500 million company is worth more than sole ownership of a $5 million company.
How do you deal with exclusion and limitation clauses in contracts?
Ideally, exclusions should be brought to the attention of the other party before the contract is signed, and this will come under particular scrutiny in consumer contracts. There has been judicial hostility to exclusion and limitation clauses, which can make them hard to “stick” if tested in the courts.
Do exclusion clauses apply to indemnities from suppliers?
If a contract contains on the one hand, exclusions of liability in favour of the supplier and on the other, indemnities from the supplier, a supplier should consider whether all or particular exclusion clauses apply to the indemnities and if so ensure this is clear.
What should be included in a claim clause?
In some cases, the clause may state that it is the only solution for the damaged party to be compensated for their losses. If this is the case, the clause should also define how a claim can be brought, including: The scope of the claim. The maximum amount of liability that can be covered. The time periods when the party may bring a claim.
What is a change clause in a contract?
Changes Clause – A contract clause that allows the contracting officer to make unilateral, substantive changes to a contract, as long as the changes are within the general scope of the contract. (FAR 43.201) 10.