Difference Between a Non-Competition Clause vs. a Non-Solicitation Clause

In this video, we're going to take a look at non-competitions and non-solicitation clauses. These types of clauses are often found in employment agreements, contractor agreements and shareholder & partnership agreements.

Today we're going to take a look at non-competition and non-solicitation clauses.

These types of clauses are often found in employment agreements contracts or agreements and also shareholder and partnership agreements. So they're very important to understand.

What's a non-competition clause?

In a non-competition clause, the employer is prohibiting the employee from competing with the business both for the term of employment and for a period of time after the employment is over. So, whether the employee leaves or is fired, it doesn't really matter but for period of time usually, six months to a year that employee is going to be prohibited from competing with the business.

Benefits of Using a Holding Company | 4 Reasons To Consider A Holding Company

What are the benefits of a holding company?

Asset Protection

A holding company can provide you with more protection over your business. When you transfer non-essential or redundant assets out of your Operating Company into your Holding Company, then if your Operating Company was ever sued or if creditors were seeking to obtain assets from the OpCo, the assets would be protected because they would be in your HoldCo.

Qualified Small Business Shares

One day you’ll be selling your business, and hopefully taking advantage of the lifetime capital gains exemption. Your shares must qualify in order to utilize the lifetime capital gains exemption. There is a very of criteria that the business must meet in order to make use of the exemption and, one of them is that 90% of the assets in the Operating Company must be actually used - that is, you can’t have too much excess cash lying around. Holding companies allow you to transfer that cash out of Operating Company through a tax-free dividend to keep your shares qualified

Thinking of Incorporating your Small Business?

This video describes the main benefits of incorporation for the small business owner:

1) Liability protection

2) Saves you money on taxes

3) Eligibility for the Lifetime Capital Gains Exemption upon sale of your shares

4) Flexibility in how you structure, fund and operate your small business

How to make sense of your startup employee stock option package

For early-stage startups, offering employee stock options can be a key part of attracting and keeping key talent. A stock option is an agreement that gives an employee the right to buy shares in the company at a discounted rate.For the employee on the receiving end, making sense of a complex, jargon-heavy stock option offer can be daunting. Given that such shares can carry significant risk - with startups often having poor survival ratings - it is very important to properly evaluate your stock option offer.Here is a guide to making sense of your stock option offer.

First, do a basic assessment of the company

The first step is to conduct a basic assessment of the company. This is key to understanding the risk involved with any stock option plan.At what stage of investment is the company at? Is the company a pre-seed investment? If yes, you need to understand that this is the highest-risk stage of a company lifecycle. 90% of new companies never get to VC funding and founders can be delusional about their prospects for investment. So take any claims that a company has a large, interested investor with a grain of salt.