Articles for April 2016

How do you structure a merger?

A merger is a process whereby two companies statutorily cease to exist and combine into one of the two or into a new entity.  The surviving company or new company absorbs all the assets and liabilities of the merged company.

How do you structure a stock purchase?

A stock purchase refers to a business acquisition by purchasing the company that owns the business.  If the company is a corporation, it’s a stock purchase.  If it’s a limited liability company, it’s a membership interest purchase.  If it’s a partnership, it’s partnership interest purchase.

What is Regulation D?

The Securities Act prohibits offering a security for sale until a registration statement covering the security has been filed with the SEC.  Section 4(2) of the Act establishes a statutory exemption from registration for private offerings—i.e. private placements of securities.  Regulation D specifies the conditions for claiming the statutory private placement exemption, which is the most common exemption for start-ups.

What is Regulation S?

Regulation S provides an exemption from the registration of securities offered and sold outside of the United States.  There are two main exemptions under Reg S, which are called safe harbors.  Rule 903 and Rule 904.