Why you should keep board minutes
As part of every due diligence exercise for operating companies, real estate projects, and investment funds, CrowdCheck will ask to see all of the minutes of the meetings of the Board of Directors or managing body, or the written consents in lieu of meetings, of the issuer in the securities offering. Documented minutes or consents […]
LLCs and LPs Must Follow Their Own Rules
Entrepreneurs and fund managers appreciate the flexibility that comes from organizing as a limited liability company (“LLC”) or a limited partnership (“LP”). In contrast to C Corporations which have specific rules under the Delaware Corporations Code and similar state statutes, LLCs and LPs have the ability to write into their own operating agreements or partnership […]
Regulation A+ and Testing the Waters
One of the most useful provisions of the Regulation A+ Rules issued by the SEC on May 25 is new Rule 255, “Solicitations of interest and other communications.” This provision allows companies to “test the waters” and determine if there is any interest in its investment offering before it has filed anything with the SEC, prepared any […]
CrowdCheck releases its summary of Regulation A+
On March 25, 2015, the SEC adopted its final rules to implement Title IV of the JOBS Act of 2012. These rules are popularly known as “Regulation A+” and provide for two tiers of offerings under Regulation A. For more details on the new rules, check out CrowdCheck’s summary here, http://www.crowdcheck.com/sites/default/files/Regulation%20A%20Memo%20FI….
Don’t forget to pay your franchise taxes
One of the things that any securities due diligence should look at is whether a company or investment vehicle is in good standing with its state of organization. Good standing indicates that the company is validly formed, exists as a separate legal entity, and is up to date with its obligations for that particular state. […]
Compliance challenges of intrastate crowdfunding
A recent Washington Post article by Steven Overly asked “Why has hardly anyone applied for equity crowdfunding in D.C.?” This is an important question. The DC Department of Insurance, Securities and Banking can be applauded for its efforts to promote the new rules. Representatives of the Department have spoken about the new exception at a […]
CrowdCheck guest blog post on Joe Wallin’s Blog
Rethinking Section 3(a)(11) for State Crowdfunding http://joewallin.com/2014/12/12/rethinking-section-3a11-state-crowdfunding/
Halloween blog special: Sometimes it’s the investors who are scary…
Securities laws in the United States are based around the idea of disclosure and protection of the naïve investor from unscrupulous practices by issuers of securities — the sophisticated guys duping the little guy. However, for many early-stage companies, the sophisticated guys at the table are the investors. Not only do they hold all the cards on the […]
Nobody is too big for Bad Actor Rule compliance
Previously, CrowdCheck has brought readers the message that no securities law violation is too small to bring on SEC enforcement. It is part of the “broken windows” theory of policing—if you let issuers and brokers get away with the small violations, it sends a message that compliance with securities laws is merely optional. But what happens if […]
Updated Summaries of Intrastate Crowdfunding Exemptions
Since March, when CrowdCheck first put together a summary of intrastate crowdfunding exemptions, there has been a significant amount of activity by various states to ease the regulatory process for companies to offer securities through the use of the intrastate exemption to SEC registration. The following two charts were produced as a collaboration by CrowdCheck, Anthony […]