Thomas Persson and Jon Nokes founded Smart Inventions, Inc., in 1991 to market household consumer products. The success of their first product, the Smart Mop, continued with later products, which were sold through infomercials and other means. Persson and Nokes were the firm’s officers and equal shareholders, with Persson responsible for product development and Nokes operating the day-to-day activities. By 1998, they had become dissatisfied with each other’s efforts. Nokes represented the firm as financially “dying,” “in a grim state, . . . worse than ever,” and offered to buy all of Persson’s shares for $1.6 million. Persson accepted. On the day that they signed the agreement to transfer the shares, Smart Inventions began marketing a new product—the Tap Light, which was an instant success, generating millions of dollars in revenues. In negotiating with Persson, Nokes had intentionally kept the Tap Light a secret. Persson filed a suit in a California state court against Smart Inventions and others, asserting fraud and other claims.
Is Smart Inventions, Inc. liable to Persson?
Is Nokes individually liable to Persson?
Categorized | Affiliate Marketing 101
Beginners Business Law Question?
Posted on October 12, 2011.
Business laws can be complex–you might need expert advice to comply.
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It is not only individuals who need sound legal advice: Businesses often have many questions when it comes to the law surrounding their operation. Pertinent issues faced by companies include business formation and defense.
Formation
Forming the right type of business is key. With sole proprietorships, limited liability companies, and other types of organizations, strict rules apply to the procedures for expansion and taxes. Obtaining sound legal advice at the start of your enterprise makes legal problems less likely later.
Business Defense
Defending a business from lawsuits is often more complicated than defending an individual. Businesses affect more than one consumer, so every day there’s the potential for lawsuits that could be numerous and wide in scope. Class-action lawsuits, in which more than one party attempts to sue a company or organization, are one such legal issue.
Considerations
If you have questions or concerns regarding business law, consult an attorney with expertise in this area. Do not choose a lawyer with generalized experience. You want a professional with the background and knowledge to handle legal issues related to business formation, dissolution, or defense.
Read more: Issues on Law & Business | eHow.com http://www.ehow.com/facts_7424728_issues…