Blog, Corporate Law, Ethics Investigations and Crisis Management
Your Employee Did What? How a Corporate or Internal Investigation Protects What You Have Built.
As leaders too-often learn, employee misconduct occurs despite the best possible recruitment, vetting, and training. Misconduct occurs in the corporate world, non-profits, government agencies, and schools. The source of the allegation and the nature of the act may vary. The report may come from another employee, a client, a vendor, or a regulatory official, and it may concern criminal activity, violation of policies, or other actions with the potential to tarnish the organization’s reputation. Regardless what was done or how you found out, a thorough investigation is required for a number of reasons. A well-run internal investigation benefits the company in a number of direct ways. It stops the conduct, cutting off the damage. If the victim of embezzlement or other financial impropriety, you must stop the flow of money; in the case of harassment, you must stop the harassment, and create the opportunity to build a better, and more productive, work environment. In all cases, a thorough investigation demonstrates to the employees and customers that the institution takes its employees’ conduct seriously. Failure to act may expose the institution to liability in a number of ways. If an investigation could have prevented further harmful conduct, the victims may pursue a claim against the company (including through a claim of negligent hiring, negligent supervision, or the doctrine of respondeat superior). Further, a prompt and thorough investigation demonstrates the proactive nature of the company and makes a finding of culpability and acquiescence by the company less likely should a claim be made against the company. From a…
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The Series LLC – A new corporate form for those requiring a holding company or multiple divisions
The Indiana Legislature recently enacted a new option for business owners selecting a corporate form – an option particularly suited for owners who require a holding company, umbrella company, or multiple divisions. House Enrolled Act (“HEA”) 1336, passed March 23, 2016 and codified as Indiana Code Sec. 23-18.1 et seq., changed a number of aspects of business and other association law, including the ability to create Series Limited Liability Companies (“Series LLCs”). Effective January 1, 2017, Indiana will become the 14th state (plus Puerto Rico) to have statutes allowing for Series LLCs. A Series LLC consists of a Master and one or more separate divisions referred to as Series. An important feature of Series LLCs is the ability to provide limited liability protections between Series and also between a Series and the Master. Although this is possible today through the use of separate LLCs, the process is convoluted and requires separate filing fees for each company, as well as separate applications to do business in other states. So what does that mean for you? A Series LLC is not for everyone, but does have a number of advantages. First, a Series LLC can reduce the number of filings and the costs. While each individual LLC requires that a biannual report be filed, the Series LLC only requires the filing of a single biannual report for all entities within the Series LLC. After the Master LLC is formed, it is also cheaper to form new Series. However, with only a few series, the filing costs may…
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