McBride Law Blog

BLOG

Tagged Posts: Texas’

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption (Part 5)

January 5, 2016

Texas Crowdfunding Portal Registration and Activities (in Detail).

Simplified/Streamlined Registration Process. The simplified registration process for TCPs, which we discussed previously, is designed so that TCPs are subject to fewer regulatory requirements than general securities dealers, because they are limited in what they can do.[1]

No Investment Advice. Of note, a TCP is prohibited from offering investment advice or recommendations, so in listing issuers on its platform, it is important for the TCP not to provide an implicit endorsement or recommendation.… Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption (Part 4)

December 22, 2015

Texas Crowdfunding Portal Registration and Activities.

As we mentioned previously, an offering conducted under the crowdfunding exemption must be made exclusively through an Internet website operated by a registered general dealer or registered TCP.

Local Character. Just like crowdfunding issuers, a TCP must be an entity formed and authorized to do business in Texas.[1]  A TCP should be physically located in and operate exclusively within Texas.[2] Moreover, a TCP must be engaged exclusively in intrastate offers and sales of securities in Texas and limit its activities to operating an Internet website utilized to offer and sell securities under the Texas crowdfunding exemption, without operating or facilitating a secondary market in securities.… Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption (Part 3)

December 17, 2015

How Should the Offering Be Conducted?

Must Use a website. An offering conducted under the crowdfunding exemption must be made exclusively through an Internet website operated by a registered general dealer or registered TCP.[1] Such website must meet the following requirements:

  • A disclaimer that access to the website and offers and sales of the securities are limited to Texas residents;
  • An affirmative representation by a visitor to the website that the visitor is a Texas resident before they can view information on the website;
  • Evidence of Texas residency before a sale can be made to a prospective purchaser, e.
Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption (Part 2)

December 12, 2015

Who Is Eligible?

Texas Formation. Texas crowdfunding exemption is only available if the issuer is a Texas entity that has filed a certificate of formation with the Texas Secretary of State and is authorized to do business in Texas.[1] This means that sole proprietor, general partnerships, or joint ventures would not be eligible to use the exemption, as those types of businesses do not file a certificate of formation, nor would companies whose certificate has been terminated or forfeited for failure to file a required report, to pay franchise tax or penalty, or to maintain a registered office or registered agent.… Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption

December 8, 2015

In our previous blog series titled “Crowdfunding: Is It Right for My Business?”, we discussed Title III of the JOBS Act, popularly known as the “CROWDFUND Act (Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012),” which would exempt crowdfunded securities from the federal registration requirement. On October 30, 2015, the Securities and Exchange Commission (‘SEC”) finally voted to adopt the final rules to implement the law (see our previous blog titled “SEC Votes To Adopt Federal Crowdfunding Rules”).… Read the rest

Comparison of LLC Statutes

August 10, 2015

Other Considerations

So, now that you have done your research, you decide to form your LLC in Delaware and file the required forms in Delaware.  Is that all you need to do?  It depends on where you actually conduct business.  Most, if not all, states require foreign LLCs (i.e., LLCs formed under the laws of another jurisdiction) to register or apply for authority to do business in that state, if the LLC does business there.  What constitutes “doing business” in a particular state is often debatable, but having a principal place of business or regularly engaging in transactions would most likely count as such, subjecting the entity to the state’s foreign LLC filings, fees, and taxes.… Read the rest

Comparison of LLC Statutes

August 6, 2015

Court System: Who Will Hear My Case?

At times, even with careful planning and drafting, business relationships may turn sour and amicable resolution impossible.  This is where being a Delaware entity might prove to be decisively advantageous.  Delaware houses the nation’s oldest business court, the Delaware Court of Chancery established in 1792.[1]  As a court of equity, it has broad jurisdiction over disputes involving the internal affairs of Delaware business entities and has developed a respected body of case law interpreting Delaware business law.… Read the rest

Comparison of LLC Statutes

August 3, 2015

Series Availability: The Latest Option

Another interesting difference among LLC statutes is the availability of series LLC.  This relatively new concept is said to have its origin in offshore financial institutions as a way of allocating assets and risks among a series of companies.  Series LLC offers numerous advantages, which include flexible structure, greater protection against liability, and lower filing fee and administrative burdens, but is also fraught with uncertainty, particularly with respect to its treatment under federal bankruptcy law and the laws of states that do not recognize series LLCs. … 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.