Pasadena Business Law Attorneys

A sole proprietorship is the simplest structure — one person owns and operates the business with no legal separation between the owner and the business. An LLC (Limited Liability Company) creates a separate legal entity that can protect personal assets from business debts. A corporation is a more formal entity with shareholders, a board of directors, and officers, often used by businesses seeking outside investment or planning to go public.

Most business entities — including LLCs, corporations, and partnerships — must register with the state in which they operate. Sole proprietors typically do not need to register unless they use a trade name (also called a DBA or "doing business as"). Requirements vary by state and industry.

A registered agent is a person or company designated to receive official legal and government documents on behalf of a business. Most states require LLCs and corporations to maintain a registered agent with a physical address in the state of formation. The registered agent must be available during regular business hours.

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Verbal agreements can be legally binding in many situations, but they are difficult to enforce because there is often no clear record of the terms. Written contracts provide documentation of what was agreed upon and are generally more reliable. Some types of agreements — such as those involving real estate, loans over certain amounts, or contracts lasting more than one year — are typically required to be in writing under laws known as the Statute of Frauds.

Most business contracts include the names and roles of the parties involved, a description of the goods or services being exchanged, payment terms and amounts, timelines or deadlines, what happens if a party fails to perform (breach), and how disputes will be resolved. A governing law clause specifying which state's laws apply is also common.

A non-disclosure agreement (NDA) is a contract that restricts one or more parties from sharing confidential information. Businesses commonly use NDAs when sharing proprietary information with potential partners, vendors, or employees — such as trade secrets, business plans, financial data, or product designs. NDAs can be mutual (both parties agree to keep information confidential) or one-sided.

The key distinction generally comes down to the level of control a business has over how work is performed. Employees typically follow a set schedule, use company tools, and are directed in how to do their work. Independent contractors generally control how and when they work and often provide their own tools. Misclassifying an employee as a contractor can lead to significant legal and tax consequences. The IRS and state agencies use specific criteria to make this determination.

Enforceability of non-compete agreements varies significantly by state. Some states, like California, generally do not enforce them. Others enforce them only if they are reasonable in scope, geographic area, and duration. Recent federal regulatory activity has also sought to limit their use in employment contexts. The enforceability of any specific agreement depends on its terms and the applicable state law.

A trademark protects brand identifiers like names, logos, and slogans used in commerce. A copyright protects original creative works such as writing, art, music, and software code — it arises automatically when a work is created. A patent protects inventions and grants the inventor exclusive rights to make, use, or sell the invention for a set period. Each type of protection has different registration requirements, durations, and scopes.

Trademark rights can exist without formal registration simply by using a mark in commerce, but registration with the U.S. Patent and Trademark Office (USPTO) provides significant legal advantages — including a public record of ownership, the ability to sue in federal court, and a basis for blocking infringing imports. If your brand identity is important to your business, registration is generally worth considering.

Piercing the corporate veil refers to a court's decision to hold the owners or shareholders of a corporation or LLC personally liable for business debts or legal judgments, despite the usual liability protection these structures provide. This typically happens when courts find that the business was not operated as a separate entity — for example, if personal and business finances were commingled, corporate formalities were ignored, or the structure was used fraudulently.

ADR refers to methods of resolving disputes outside of court, most commonly arbitration and mediation. Mediation involves a neutral third party helping the disputing parties reach a voluntary agreement. Arbitration involves a neutral arbitrator (or panel) who hears both sides and issues a binding or non-binding decision. Many business contracts include ADR clauses that require disputes to be handled this way rather than through litigation.