Matters to Explore Before Signing A Shareholder Buy-Out Agreement

Issues Arising After a Shareholder-Employee Departure
 If you’re an employee in a company, you may be terminated as an employee where you’re an “at-will” employee or for other reasons when you’re in a contract. However, if you’re an employee and a shareholder of an organization, know that you cannot be terminated as a shareholder. Often in a business cycle, shareholders may reach a point where the shareholders can no longer work together. So what happens to the departing shareholder? Quite a bit. If you’re a shareholder and employee, become familiar with your shareholder agreements or buy-sell agreements in place. These documents may instruct what happens in the event a shareholder departs from the organization.  A departing shareholder-employee situation may become a bigger issue when there is no document addressing this need.
Various topics can become complicated
 This entry explores only a few items that must be explored and can become complicated after shareholder-employees separate.
  1. Employment contract – in addition to shareholder agreements and corporate documents in order, review your employment agreement to determine what your future holds with respect to benefits and/or restrictions.
  2. Unfair Competition and Trade Secrets – Unfair competition arises when a former business relationship uses deceit or insider information to gain a business advantage.
  3. Noncompete Clause – A noncompete clause may prohibit an employee from working in the same field or from working for a competitor. Various California regulations may deem these types of clauses as unenforceable.

If you find yourself in the position where you can no longer work with other shareholders in your organization, reach out to an attorney for a consultation as early as possible. Before signing a shareholder buy-out or shareholder withdrawal agreement or similar document, learn about your options that are particular to your circumstances. Published online recommendations are general in nature, therefore, know that your situation and the factors surrounding your situation.

Before signing a Shareholder Buy-Out Agreement

It is important to meet with an attorney to explore your matters. The difference between meeting with an attorney and not could mean hundreds of thousand of dollars in liabilities in the future.

News Release: Law firm Ryan-Cruz Law, APC opens in San Diego, CA. Ryan-Cruz Law, APC practices in the areas of business law, real estate, estate planning and IP.

San Diego native and attorney Ruth Ryan-Cruz, Esq. established and launched Ryan-Cruz Law, APC with its principal office in Mission Valley, California (3111 Camino Del Rio North, Suite 400). Ruth Ryan-Cruz attended San Diego State University and CSU San Marcos for undergraduate education. She attended California Western School of Law for graduate education and now serves on the CWSL Alumni Board of Directors executive board.

Ryan-Cruz Law, APC’s mission: To provide quality legal services and make a measurable difference in the lives of the community members served. The firm was founded in June, 2015 by Ruth Ryan-Cruz, Esq., formerly an associate attorney at a boutique law firm in downtown San Diego with deep experience in various transactional and litigation matters. With experience in legal transactions, negotiations and successful dispute resolution, Ryan-Cruz Law aims to vigorously represent, prosecute on behalf of, and defend its clients. A favorite firm quote reads, “All people are equal before the law. A good attorney is what makes a difference.” With this in mind, the firm aims to practice this concept by providing legal services as a true attorney and counselor at law. In representing a client’s interests, Ryan-Cruz Law, APC intends to keep the client’s priorities and needs at the forefront. With ongoing communication, well-researched points, creative legal strategies, custom-tailored solutions and touches of human element, representation at Ryan-Cruz Law, APC focuses first and foremost on clients as people.

Client review excerpt: “Excellent, friendly, and helpful!! Ruth was fantastic to work with, very knowledgeable about my inquiries, and was on the ball with keeping me in the loop. Couldn’t have asked for more, she’s really the best!!” By Barrie K. (Business and Intellectual Property).

“This multi-service law firm is committed to meeting the needs of its clients by providing a tailored approach for each individual. With basic principles such as empathy, attention and respect, the firm carries on practical, efficient and solutions-oriented representation tailored to the client,” remarks Ruth Ryan-Cruz, Esq., founder of Ryan-Cruz Law, APC.

Ryan-Cruz Law also acts as outside general counsel to several businesses and corporations in the San Diego community with local, national and international business dealings. Ryan-Cruz Law is sought out by clients because of its legal acumen and strong business sense. As a result, they have become trusted members of their clients’ business teams and families.

Attorney Ruth Ryan-Cruz has been nominated and honored by various organizations including an “Excellent” rating from Avvo, San Diego Magazine and KBNT Univision San Diego’s “Latino’s Making a Difference” and San Diego Daily Transcript’s “Young Attorneys.” Her articles have been published in publications including WealthCounsel, the San Diego County Bar Association’s San Diego Lawyer magazine, and San Diego Attorney Journal.

Ryan-Cruz Law, APC is a law firm in San Diego, California. Ryan-Cruz Law practices in the areas of business law, real estate, estate planning and intellectual property. For more information visit Ryan-Cruz Law’s website at To learn more about attorney Ruth Ryan-Cruz, visit her profile at

Request a free consultation:
Ruth Ryan-Cruz, Esq.
3111 Camino Del Rio North, Suite 400
San Diego, CA 92108
(619) 528-2202

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Source: PRWeb

Do you use email in your business? The CAN-SPAM Act establishes requirements for commercial messages. Applicable penalties of $16K

Do you use email in your business? The CAN-SPAM Act, a law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them, and spells out tough penalties for violations.  Read up about complying with the CAN-SPAM Act. The policies may appear simple, but violations happen frequently.

Despite its name, the CAN-SPAM Act doesn’t apply just to bulk email. It covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” including email that promotes content on commercial websites. The law makes no exception for business-to-business email. That means all email – for example, a message to former customers announcing a new product line – must comply with the law.

Each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $16,000, so non-compliance can be costly. But following the law isn’t complicated. Here’s a rundown of CAN-SPAM’s main requirements:

  1. Don’t use false or misleading header information. Your “From,” “To,” “Reply-To,” and routing information – including the originating domain name and email address – must be accurate and identify the person or business who initiated the message.
  2. Don’t use deceptive subject lines. The subject line must accurately reflect the content of the message.
  3. Identify the message as an ad. The law gives you a lot of leeway in how to do this, but you must disclose clearly and conspicuously that your message is an advertisement.
  4. Tell recipients where you’re located. Your message must include your valid physical postal address. This can be your current street address, a post office box you’ve registered with the U.S. Postal Service, or a private mailbox you’ve registered with a commercial mail receiving agency established under Postal Service regulations.
  5. Tell recipients how to opt out of receiving future email from you. Your message must include a clear and conspicuous explanation of how the recipient can opt out of getting email from you in the future. Craft the notice in a way that’s easy for an ordinary person to recognize, read, and understand. Creative use of type size, color, and location can improve clarity. Give a return email address or another easy Internet-based way to allow people to communicate their choice to you. You may create a menu to allow a recipient to opt out of certain types of messages, but you must include the option to stop all commercial messages from you. Make sure your spam filter doesn’t block these opt-out requests.
  6. Honor opt-out requests promptly. Any opt-out mechanism you offer must be able to process opt-out requests for at least 30 days after you send your message. You must honor a recipient’s opt-out request within 10 business days. You can’t charge a fee, require the recipient to give you any personally identifying information beyond an email address, or make the recipient take any step other than sending a reply email or visiting a single page on an Internet website as a condition for honoring an opt-out request. Once people have told you they don’t want to receive more messages from you, you can’t sell or transfer their email addresses, even in the form of a mailing list. The only exception is that you may transfer the addresses to a company you’ve hired to help you comply with the CAN-SPAM Act.
  7. Monitor what others are doing on your behalf. The law makes clear that even if you hire another company to handle your email marketing, you can’t contract away your legal responsibility to comply with the law. Both the company whose product is promoted in the message and the company that actually sends the message may be held legally responsible.

See more information about online advertising and marketing via the Federal Trade Commission site.

Download information about this topic via PDF.



The importance of a comma in an ordinance (and a contract). How a court case was won over a missing comma(,)

Read the following municipal ordinance prohibiting “any motor vehicle camper, trailer, farm implement and/or non-motorized vehicle” from daylong parking.

If you’re a truck owner (motor vehicle), does this ordinance apply to you? The argument here is that the ordinance applies to “motor vehicle campers” and not motor vehicles. See the difference? This ordinance would have applied to a motor vehicle, if the law had a comma where it should have.

This is exactly what happened to an Ohio woman. She ended up having a parking citation tossed by an appeals court, all because she noticed there was a comma missing in the local law. Read more about it here.

When working with your attorney, both the client and the attorney should read the document draft with a fine tooth comb to avoid technical and pivotal issues like this.  Avoid ambiguity and as you read your document, look for grammatical problems which could lead to vague provisions or provisions with more than one interpretation opportunity.  Read another example where a single comma cost a party one million dollars.



What is a Homestead Declaration?

What is a Homestead Declaration?

A homestead declaration is a written statement, made under penalty of perjury, that claims a particular “dwelling” (for example, a house, condominium, boat, or similar property) as the owner’s principal place of residence.

When a homestead declaration is (1) signed by a homeowner, (2) acknowledged (i.e., “notarized”) by a notary, and (3) “recorded,” it helps to protect the home against loss to creditors. “Recorded” means that the original signed and notarized homestead declaration is filed in the clerk’s or recorder’s office for the county in which the home is located.

A properly prepared and recorded homestead declaration immunizes the home (and the land on which it is situated) from many (but not all) legal enforcement measures. For example, if a homeowner files a petition in bankruptcy, it may be possible, because of a homestead declaration, to retain the home, or at least a portion of the equity in the property, instead of losing it to creditors.

Determining when to file a Homestead Declaration is fact-based and dependent upon your situation.  California has an automatic homestead exemption.  Based on that, you may or may not want to file a homestead declaration. If you have little or no equity in your home, little advantage is to be gained. Should you have minimal debt, there is also no reason to file a homestead declaration. Finally, if you’re planning to sell your home in the near future and have no delinquent debt problems, filing the declaration form offers no immediate advantages.  If you have little equity or minimal debt, you may still be concerned for the future.While you should file the homestead form before you have a serious financial problem, creditors cannot file liens until they obtain court judgments. You’ll have plenty of notice before you need to declare a homestead.

Speak with a professional about this topic before making this declaration with the County offices.




Do you spot the copyright infringement? A Disney Pixar legal fight is brewing

Are you able to spot a copyright infringement? Often I receive calls from persons and businesses with claims involving infringement by another person or business. During these calls, we discuss fact-based points involved in the developing legal matter before them. Upon meeting, I take a closer look at the works allegedly infringed on and subsequently provide legal counseling and enforcement strategies.

Cars and Autobots

So what does copyright infringement look like? It looks a little something like this story.   Zhuo Jianrong, director of an independent movie and executive director of a film production company states that he has never seen the Disney Pixar film, Cars, upon producing his work, Autobots.  See the Autobots movie poster on the left (image). Zhuo said that his company received legal letters from the Disney Company, which owns Pixar. Disney declined to comment on whether it had sent the letters.  He added that his production company has responded with evidence that “The Autobots” isn’t a copycat.

If this is the first time you view the Autobots and Cars movie posters side-by-side?  Would you be confused by the similarities in drawings alone?  If so, a good suspicion of infringements exists. The next step is to prove it.


Copyright is a form of protection given to the authors or creators of “original works of authorship,” including literary, dramatic, musical, artistic and other intellectual works.

Anyone who exploits any of the exclusive rights of copyright without the copyright owner’s permission commits copyright infringement. If a lawsuit is brought in a court, the infringer will have to pay the copyright owner the amount of money the infringer made from using the work or that the owner would have made if the infringement had not happened.

Proving Infringement

In order for a court to determine that a copyright in a work has been infringed upon it must find that: (1) the infringing work is “substantially similar” to the copyrighted work, and (2) the alleged infringer had access to the copyrighted work — meaning they actually saw it or heard it. There are no clear rules for deciding when “substantial similarity” exists between two works. Courts look for similarities in appearance, sound, words, format, layout, sequence, and other elements of the works.

Let’s follow this story to learn the destiny of the Autobots film.



Recording A Quitclaim Deed with the San Diego County Recorder’s Office

If you established a Revocable Living Trust in the recent past or anytime in the past, remember that after establishing your Trust, you must also “fund” the Trust. Funding it means to place things into the Trust so that it can be administered and carried out the way it is intended.

If you haven’t funded your real property into your Revocable Living Trust, you can do so by signing (before a notary public) a Quitclaim Deed and subsequently recording it locally with the San Diego Recorder’s Office.  Only real property physically located here in the county can be controlled by the San Diego County Recorder’s Office. If you live in San Diego, but have real property physically located outside of this county, you will have to seek assistance that that county’s Recorder’s Office for assistance in funding your Trust or other real property matters.

The following is more information published from the San Diego County Recorder’s Office as of July 6, 2015. You are encouraged to review their official website for current information.

The County Recorder, upon payment of proper fees and taxes, will accept any document which is authorized or required by California law to be recorded, if the document contains required information and if it is photographically reproducible.

For your convenience, documents may be presented for recording in the Assessor/Recorder/County Clerk offices at the addresses listed below.

County Administration Center
1600 Pacific Highway, Suite 260
San Diego, CA 92101
El Cajon Branch
200 S. Magnolia Ave
El Cajon, CA 92020
San Marcos Branch
141 East Carmel St.
San Marcos, CA 92078

All applicable fees must be paid at the time of recording, click RECORDING FEES.

For information on hours of business and directions to the office locations, quit this option and

Each document presented for recording MUST include or comply with the following general requirements.

If any portion of your recordable document is in a foreign language*, it must be translated into English. The translator will need to complete a Declaration and Verification of Interpretation form for submission to the County Clerk. The County Clerk will then complete a Translation Certificate for a fee of $10.00. Both the Declaration of Interpretation and the Translation Certificate forms must be completed and attached to the document prior to recording.

The document should not contain more than the last four digits of the Social Security number, pursuant to Civil Code 1798.89. This does not apply to documents executed prior to January 1, 2010 or certified copies of the death certificate attached to the documents.

  1. The property must be located in San Diego County.(CC1169)
  2. The document must be authorized or required by law to be recorded. (GC 27201)
  3. The document must be submitted with the proper fees and taxes. (GC 6301, 27201, 27261)
  4. The document must be in compliance with state and local laws.
  5. The document should Name the person requesting recording. (GC 27361.6)
  6. The document should state the Name and address to whom the document should be returned, fill in “Recording Requested By and Mail To”. (GC 27361.6)
  7. The document must be legible enough to produce a readable photographic record.(GC 27201, 27361.6, 27361.7)
  8. Signatures must be original unless the document is a certified copy issued by the appropriate custodian of the public record. (GC 27201b, GC 28288, Evid Code 1530)
  9. The document must be properly acknowledged, unless exempt. All purpose acknowledgments taken in California must be completed as prescribed by law.  Any certificate of acknowledgment taken in another place shall be sufficient in this state if it is taken in accordance with the laws of the place where the acknowledgment is made. (GOV 27201, 27285, 27287, 27288, 27289, CIV 1189)
  10. The Assessor’s Parcel Number is required on deeds by local Ordinance. (R&T 11911.1)
  11. The notary seal must be legible for a microfilm reproduction .(GC 8207)

Documentary Transfer Tax is due on all taxable conveyances in excess of $100 at a rate of $.55 per $500 or fractional portion of real property value; excluding any liens or encumbrances already of record as required, per Revenue and Taxation Code 11911. It is collected at the time of recording on each deed, or instrument. A Documentary Transfer Tax Declaration must be completed and signed for all deeds. If no Documentary Transfer Tax is due, so indicate by entering “0” on the tax line and sign the declaration. Please explain the reason why no tax is due on the document or on a separate signed statement.(R&T 11932)

When transferring property to ANYONE a “Preliminary Change of Ownership Report” IS REQUIRED per the Revenue and Taxation Code 480.2, click PRELIMINARY CHANGE OF OWNERSHIP REPORT. This document is in Acrobat PDF format.

If a “Preliminary Change of Ownership Report” is required, but not submitted at the time of recording, please include an additional $20.00 for the Ownership Change fee. Preliminary Change of Ownership Forms are available at the customer counter or it can be mailed to you upon request by calling (619) 238-8158.

You may also mail in your documents for recording with a check,cashiers check or money order made payable to:

The San Diego County Assessor/Recorder/Clerk
P.O. Box 121750
San Diego, California 92112-1750

Your request is processed upon receipt. Please allow 2-4 weeks to receive your original recorded document back in the mail.

The office of the Recorder/County Clerk is PROHIBITED from giving ANY legal advice or to assist in document preparation. We DO NOT provide any notarial services. Various types of forms may be purchased at office supply or stationary stores.

Once you have the appropriate form, you may prepare it yourself, consult legal counsel or contact a local title company or escrow company.

Photo Credit: San Diego

Happy 4th of July

Celebrate our independence day with pride and gusto! Remember to celebrate responsibly.