Securities
Jul. 25, 2022
Is the LLC exception to California’s rule against non-competition agreements enforceable?
Let’s say that three individuals own a private equity or venture capital firm. To protect their business, the individuals enter into a limited liability company agreement stating that if one of these individuals leaves the firm and joins a competitor, he or she cannot solicit the firm’s investors for one year. Five years later, one of the individuals leaves to join a competitor. Is the non-solicitation provision enforceable? It depends upon, among other things, wheth...
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