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Corporate & Securities
Head’s Up for Broker Dealers Conducting Private Placements
According to the FINRA Website, the FINRA Board of Governors took action regarding various rulemaking items at its December 8, 2010, meeting. The following was announced with respect to private placements: Private Placements The Board considered proposed amendments to expand FINRA Rule 5122 (Private Placements of Securities Issued by Members) to govern all private placements…
Reverse Merger Candidates, Take Note
New FINRA Rule 6490 ties into Securities Exchange Act (SEA) Rule 10b-17 (Untimely Announcements of Record Dates) and became effective on September 27, 2010. Over-The-Counter Market (OTC) issuers must now give FINRA at least ten (10) calendar days advance notice of transactions including, but not limited to, any issuance or change to a symbol or…
All About Partnership Agreements
New businesses face lots of risks, no doubt. One of the best things you can do if you are beginning a business with a partner is to put together a partnership agreement. This legal document clearly spells out the rights and responsibilities of each partner, which can minimize the chance of a legal dispute down…
A Brief Look at Liquidation Preference
In the world of venture capital, one of the common methods for minimizing investor risk is liquidation preference. But what is it, and how does it work? Liquidation preference, a common tool included in a venture financing deal sheet, assures that, should the company be liquidated or sold, preferred shareholders will always get something back…
Mitchell Littman to Speak at Silicon Valley Event
Littman Krooks LLP founding partner Mitchell Littman will be among the experts speaking at Private Company Stock Conference 2010, to be held Sept. 27 at the Four Seasons – Silicon Valley in East Palo Alto, California. Mr. Littman will participate in a panel discussion concerning “Legal Considerations for Issuers: Protecting Private Company Exemptions,” scheduled to…
How to Design and Implement an Equity Incentive Plan
It is obviously important for companies to attract and retain top-level workers. It is equally important to motivate and encourage them to strive for success. Offering equity incentive plans to high-level employees frequently accomplishes both tasks. An equity incentive plan is a contract between the employee and the employer to provide an equity interest in…
Mitchell Littman | Corporate Seminar
Mitchell Littman to Speak at Silicon Valley Event September 16, 2010 – Littman Krooks LLP founding partner Mitchell Littman will be among the experts speaking at Private Company Stock Conference 2010, to be held Sept. 27 at the Four Seasons – Silicon Valley in East Palo Alto, California. Mr. Littman will participate in a panel…
Special Purpose Acquisition Corporations Benefit Mergers
Special Purpose Acquisition Companies (SPACs) can offer a number of advantages to benefit mergers–from creating more liquidity to attracting new investors. A Special Purpose Acquisition Company or Corporation (SPAC) is a publicly-traded buyout company that raises money for the purposes of pursuing the acquisition of an existing company. SPACs can be an excellent vehicle for…
The Business Judgment Rule and Director Liability
The business judgment rule is a legal concept that gives the directors and officers of a corporation a measure of protection against liability while they are conducting business for their corporation. Directors and officers are entrusted with the responsibility of managing the corporation’s affairs. In this role, they often face difficult questions concerning whether to…
Initial Staff Guidance on Revised Net Worth Test for “Accredited Investor”
In our post dated July 19, we noted that as a result of the adoption of the Wall Street Reform Act, one of the definitions of “Accredited Investor” was amended to exclude from the calculation of an investor’s net worth the value of the his or her primary residence. In late July, the SEC Staff…
