Onki Kwan, Esq.

02/09/2020

Commissioner Hester Pierce of the SEC proposes a rule to exempt certain token sales from the securities laws. Her proposal reflects how some companies have been running ICOs.

As you may have heard, SEC Commissioner Hester Pierce recently proposed an exemption for certain token sales from the securities laws. She introduced this

01/30/2020

If you’re a mission-driven entrepreneur doing business in California, here are two for-profit business entities you should know about. Other types of corporati

04/11/2019

Last week, the SEC issued its first no-action letter to TurnKey Jet, greenlighting its ICO, but this looks nothing like the ICOs that were so popular in 2017.

Specifically, TurnKey has to play by the following rules:

- It will not use the proceeds of the sale to develop the platform, app, network or wallet and that these will be fully functional when the tokens are sold;

- The tokens will be immediately usable for their intended function;

- TurnKey will not allow the transfer of tokens outside of the platform;

- Each token will be valued at $1 and will represent $1 worth of value for services from TurnKey’s platform;

- TurnKey will only repurchase the tokens at a discount unless ordered by a court to do otherwise;

- TurnKey will only market the functionality of the tokens and not a potential increase in its market value

Read the no-action letter here: https://www.sec.gov/divisions/corpfin/cf-noaction/2019/turnkey-jet-040219-2a1.htm

04/05/2019

Yesterday, the SEC published a framework for ICOs, which describes the factors they look at in deciding whether an ICO is subject to the U.S. securities laws.

The framework focuses on the Howey test, the test for one type of security called the "investment contract." This test is used to capture new ways of raising money which may not fall under other definitions of securities.

The Howey test is only a starting point for determining whether a particular ICO is an offer or sale of a security. There are other types of transactions that are also considered securities transactions. When in doubt, consult a lawyer.

https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets

03/27/2019

When you hire employees, it’s important for you to protect your company. A confidentiality and inventions agreement or CIAA helps protect your company’s confidential information and ensures that the company owns any work created by an employee during his or her employment.

03/15/2019

When businesses first start off, a lot of them want to know whether they can hire independent contractors instead of employees.

Why do companies want to hire independent contractors? It saves money and at the early stages of their company, workload is uncertain. It can also help companies obtain services from workers that have special skills.

However, if you are looking to hire an independent contractor, you must be careful not to misclassify them. You can face stiff penalties for misclassifying your workers as independent contractors when they should have been classified as employees.

Some businesses think that having an independent contractor agreement will shield them from misclassification. This is not true! The IRS and EDD will look at the reality of the relationship between a worker and the company to determine whether an independent contractor agreement exists.

This video explains what the IRS looks at when determining whether a worker is correctly classified as an independent contractor. This includes 3 factors:

1. Behavioral control;
2. Financial control; and
3. The type of relationship between the parties

The EDD’s standards are similar.

02/25/2019

Many lawyers will tell you to only raise money from accredited investors and to avoid non-accredited investors altogether. While this is the most popular way of private finance, other options are available and if you're looking for investment funding for your company, you owe it to yourself to learn what they are.

Many lawyers will tell you to only raise money from accredited investors and to avoid non-accredited investors altogether. While this is the most popular way...