What Every Company Should Know About Unregistered Offerings
What Every Company Should Know About Unregistered Offerings When a company wants to raise money by selling shares or bonds, it usually has to “register” that sale with the U.S. Securities and Exchange Commission (SEC). But sometimes companies don’t go through this public registration process. Instead, they rely on certain legal exceptions that let them […]
Term Sheets Explained: The Deal Before the Deal
Term Sheets Explained: The Deal Before the Deal A term sheet is a simple document that outlines the basic terms of a deal before the full contract is written. It’s like a roadmap that helps both sides see if they’re on the same page before spending time and money on detailed negotiations and legal work. […]
What Companies Need to Know About Listings, Governance, and Capital Access before Going Public in the U.S.?
What Companies Need to Know About Listings, Governance, and Capital Access Before Going Public in the U.S.? Going public, whether for a budding startup or an established company seeking to expand its horizons, is a momentous milestone in the life cycle of any business. But going public on a multi-tiered exchange like the NYSE or […]
The Legal Impact of Drag-Along Agreements on Founders, Investors, and Minority Shareholders
The Legal Impact of Drag-Along Agreements on Founders, Investors, and Minority Shareholders Imagine you and a group of friends start a company together. Over time, you bring in outside investors to help grow the business. These investors provide the funding you need, but in return, they get a say in how the company is run. […]
Equity Vesting in Employment and Corporate Agreements
Equity Vesting in Employment and Corporate Agreements When a company offers stock options to employees, it does not hand over all the shares immediately. Instead, the process of becoming fully entitled to these shares happens gradually over time, which is known as vesting. The most common arrangement for vesting spans four (4) years. However, there […]
Liquidation Preferences: The Investor’s Legal Recipe for Getting Paid First
Liquidation Preferences: The Investor’s Legal Recipe for Getting Paid First Imagine you’ve invested in a company, and now it’s being sold or its assets are being liquidated. A liquidation preference determines who gets paid first and how much they get before others receive anything. Think of it as a safety net for investors. If the […]
Clarifying the Legal Definition of a Security
Clarifying the Legal Definition of a Security The term “security” may sound straightforward, but in law, it carries significant weight. Knowing what qualifies as a security might become critical, as it determines whether a transaction must comply with securities regulations. This distinction does not just affect buyers and sellers. It also involves brokers, advisors, and […]
Withholding Tax Requirements and Exceptions for Non-US Investors in Venture Capital Fund Transfers
Withholding Tax Requirements and Exceptions for Non-US Investors in Venture Capital Fund Transfers Participation in the resale market for venture capital funds is crucial for investors who wish to liquidate their investments earlier than initially anticipated. This requirement might be due to diverse personal or strategic financial points like a sudden demand for liquidity or […]
The Supreme Court’s Reaffirmation of the Seventh Amendment in SEC v. Jarkesy
The Supreme Court’s Reaffirmation of the Seventh Amendment in SEC v. Jarkesy A very recent ruling by the Supreme Court came on June 27, 2024, in Securities and Exchange Commission v. Jarkesy, which held that the Seventh Amendment to the U.S. Constitution requires the Securities and Exchange Commission (SEC) to bring a civil penalty for […]
SCOTUS Rules on Estate Tax Dispute Over Life Insurance Proceeds and Buy-Sell Agreements
SCOTUS Rules on Estate Tax Dispute Over Life Insurance Proceeds and Buy-Sell Agreements Michael and Thomas Connelly were brothers who co-owned Crown C Supply, Inc., a building supply corporation. Michael held a significant majority of the company with 77.18% of the shares, while Thomas owned the remaining 22.82%. To protect the future of their business […]