Half-Course: Law and the Life Cycle of a Business -Legal Aspects of Entrepreneurship

Course Number 1555

Senior Lecturer Lena G. Goldberg
Late Fall, 15 Session half-course
1.5 Credits
Exam

CAREER FOCUS

This course is designed for students who may want to start, join or invest in a start-up or new business at any time during their career. Its goal is to develop an understanding of the legal concepts that are an integral part of decision making from the time an entrepreneur starts and funds a new company through the decision process that may result in going public. No prior legal training is assumed. Students in the JD-MBA program are welcome to take this course but the topics will be covered in greater detail in Law School courses.

EDUCATIONAL OBJECTIVES

This course has four objectives. First, it will help students understand how law can facilitate or impede business transactions. Second, it will provide an overview of the basic corporate, fiduciary, contract, employment and securities law issues encountered by start-up and early stage companies. Third, it will introduce students to the regulatory and compliance challenges facing companies contemplating going public. Finally, it will discuss approaches to the communications' challenges of translating legal advice and analysis into business language. The course will develop tools for using legal concepts effectively, managing the legal function and maximizing the returns from interactions with counsel.

COURSE CONTENT AND ORGANIZATION

The course has four modules organized around the life cycle stages that are experienced by many start-up companies.

Formation Issues explores the different forms of business organization, tax and investment consequences of each form, contractual arrangements among founders and legal protections for corporate assets and opportunities, MACs and MAEs, duties of loyalty, good faith and fair dealing, and planning for separation from as well as success of a new venture.

Financing Issues focuses on critical legal issues involved in raising capital including which terms in term sheets really matter, ensuring that the documents match the deal, governance and control under VCs, legal consequences of tapping into alternative and international forms of capital, and the legal drivers critical to decision-making about going public.

Employment and Compensation Issues Issues discusses legal aspects of rewarding and incenting and legal protections for employees including terms of employment contracts and employee agreements, rights of employees at will, non-competition agreements, whistle-blowing, compensation design in the pre-public stage, and employment litigation.

Accessing Public Markets examines the legal considerations that factor into the decision to sell, go public or remain private including the legal mechanics of implementing these options, potential legal liability associated with each option, and public company regulatory and compliance obligations, including the tension inherent in board-management-shareholder relationships.

COURSE REQUIREMENTS

There will be a self scheduled open book take-home final exam. Grading will be based equally on the final exam and class participation. Cross-registrants are welcome to take this course.