Sioux Falls Startup Attorneys & Lawyers

KEY TAKEAWAYS

• Indemnification helps to provide parties with financial protection from loss or damages that result from another’s actions.

• Indemnities can be contractual, tortious, or statutory,

• Indemnities can result in unexpected liabilities and may extend beyond the originally intended scope.

What is Indemnification?

If you have drafted or reviewed a contract, you have likely encountered an indemnification clause, provision, or agreement. These may arise in many contractual settings. In the business world, indemnification is a safety net, providing parties with financial protection from loss or damages that result from another’s actions

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Key Takeaways

• Piercing the corporate veil allows courts to hold LLC or corporate owners personally liable for business misconduct.
• Courts look for misuse of corporate form, fraud, undercapitalization, and lack of formalities.
• Closely held businesses and single-member LLCs are especially vulnerable.
• Proper separation of business and personal finances, formal documentation, and adequate capital are essential to maintain liability protection.
• Courts are cautious and selective when piercing the veil; it typically occurs only under egregious circumstances.

What Does It Mean to Pierce the Corporate Veil?

Piercing the corporate veil is when the courts ignore the "corporate veil" placed on an LLC or corporation. A corporate veil is when a business is incorporated so that its owners, shareholders, and employees will not be held personally responsi

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Key Takeaways

• Warrants vs Options: Both give the right (not obligation) to buy securities, but differ in issuance—warrants are issued by companies, options by exchanges.
• Startup Usage: Startups use options to offer existing shares as compensation; warrants create new shares and are used to attract investors.
• Maturity & Dilution: Warrants often have longer terms and cause dilution; options do not dilute share count.
• Market & Regulation: Options are standardized, exchange-traded, and allow margin trading. Warrants are customized, over-the-counter, and typically require SEC registration.
• Flexibility & Strategy: Options allow broader trading strategies and shorting. Warrants are limited in use and mostly appeal to long-term investors.
• Tax & Ownership: Tax treatment varies—options are often compensatory, whi

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