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Tagged Posts: directed selling efforts’

Additional Ways I Can Sell or Allocate Ownership of My Company Without Registering Stock, LLC or Other Interests: Discussion of Common Exemptions Roundup (Post 3)

February 23, 2016

Employee Equity Compensation Under Rule 701.

Rule 701 allows companies to offer securities to their employees and certain other persons without the need to file a registration statement.  Specifically, non-reporting or private companies may offer and sell securities under a written compensatory benefit plan or contract for their employees, directors, general partners, trustees, and officers, as well as consultants and advisors who are natural persons and provide bona fide services outside of a capital-raising transaction.[1]  A “compensatory benefit plan” is defined as “any purchase, savings, option, bonus, stock appreciation, profit sharing, thrift, incentive, deferred compensation, pension, or similar plan.”[2]  The SEC’s policy consideration behind adopting this rule was that it would be an unreasonable burden to require private companies, many of which are small businesses, to incur the expenses and disclosure obligations of public companies when they offer securities to their employees for compensatory, rather than capital-raising, purposes.… Read the rest

Additional Ways I Can Sell or Allocate Ownership of My Company Without Registering Stock, LLC or Other Interests: Discussion of Common Exemptions Roundup (Post 2)

February 16, 2016

Offshore Offerings Under Regulation S.

Companies that want to go outside of their own state for an alternative source of capital but do not want to go through the registration requirements might want to consider Regulation S.  Regulation S provides an exemption for offers and sales of securities, debt or equity, outside the United States, on the following general conditions:

  • The offer or sale is made in an offshore transaction; and
  • No directed selling efforts are made in the United States, meaning no activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the securities offered, such as an advertisement in a publication with a general circulation in the United States.
Read the rest

Additional Ways I Can Sell or Allocate Ownership of My Company Without Registering Stock, LLC or Other Interests: Discussion of Common Exemptions Roundup (Post 1)

February 9, 2016

Exempt Offerings for Other Types of Markets or Purposes.

In our previous blog series on raising capital through exempt offerings (available here), we looked at some of the most commonly used exemptions from the federal registration requirements, including those under the JOBS Act.  In another blog series on Regulation D offerings (available here), we focused on various exemptions under Regulation D and discussed why Rule 506 remains the most dominant exemption of all to date.  In all likelihood, the exemptions covered in those two series are about all of the common exemptions that companies seeking to raise capital in the United States would consider absent special circumstances, but there are also exemptions that are designed for other types of markets or purposes.  … Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.