In 2021, Congress passed the Corporate Transparency Act (CTA) which will require many companies to report information about the company and its beneficial owner(s) to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Regulations implementing the CTA became effective Jan. 1, 2024. Attorney Jack Beeler explains the new regulations and what businesses need … Continue Reading
Legislation aimed at increasing access to investment opportunities for all individuals regardless of their income or wealth level passed the House recently on May 31, 2023. H.R. 2797, or, the Equal Opportunity for All Investors Act of 2023, shares the name of a similar bill that never made it past the House after its introduction … Continue Reading
On April 14, 2021, the U.S. Senate confirmed Gary Gensler, President Joe Biden’s nominee, to chair the U.S. Securities and Exchange Commission (SEC) until June 5, 2021. The Financial Industry Regulatory Authority (FINRA) issued a statement, in which the organization characterized Mr. Gensler as an advocate “for the interests of investors.” Investors and the SEC … Continue Reading
Most companies established or registered to do business in the U.S. do not have to disclose or report their ownership information—but that is about to change. The recently-enacted Corporate Transparency Act, which went into effect Jan. 1, 2021, requires certain companies to report their beneficial owner(s) to the U.S. Department of Treasury’s Financial Crimes Enforcement … Continue Reading
On Oct. 7, 2020, the Securities and Exchange Commission (SEC) proposed a limited and conditional exemption from broker registration for natural persons, referred to as “finders,” who seek to help non-reporting, private companies raise capital from accredited investors in exempt offerings, subject to certain conditions. Generally, persons who effect transactions in securities for the account … Continue Reading
On Aug. 26, 2020, the Securities and Exchange Commission (SEC) adopted amendments to Rule 501(a), Rule 215 and Rule 144A of the Securities Act of 1933 (Securities Act). These amendments are part of the SEC’s efforts to more effectively identify qualified investors and allow for expanded investment opportunities, while still maintaining appropriate levels of investor … Continue Reading
On March 13, 2020, in response to the recent outbreak of the coronavirus disease (COVID-19), the Securities and Exchange Commission released guidance providing regulatory flexibility to reporting companies seeking to change the date, time, or location of annual shareholder meetings and use new technologies, such as “virtual” shareholder meetings, that avoid the need for in-person … Continue Reading
On March 4, 2020, the Securities and Exchange Commission issued an Order granting conditional relief from certain filing obligations under the federal securities laws for reporting companies whose compliance may be delayed by the coronavirus disease (COVID-19). In the press release accompanying this unprecedented Order, SEC Chairman Jay Clayton noted, “The health and safety of … Continue Reading
As spring approaches, so do annual shareholder meetings for many public companies. Traditionally, these meetings were held in-person. However, due to fairly recent advances in technology, companies now have the option to hold these meetings exclusively online or by providing for online participation, which both offer advantages and disadvantages to shareholders and company leaders. Furthermore, … Continue Reading
One of the worse situations a company may face to be determined to be an investment company under the Investment Company Act of 1940, as amended (the act). If determined to be an investment company, the company is subject to the full regulation under the act. In addition, a company may inadvertently become an investment … Continue Reading
Any person who regularly monitors the U.S. financial markets has likely noticed the recent emergence of digital currency, also referred to as “cryptocurrency,” in recent months. For example, the price of bitcoin, the most widely known form of cryptocurrency, surged from a price below $800 per bitcoin in 2016, to a remarkable $17,000 per bitcoin … Continue Reading
Joint ventures should be considered as an alternative to an acquisition if the acquiring party feels it does not have the experience or the business risk appetite to do it individually. They have the benefit of allowing parties to have greater success working together on a specific project than if they did it themselves. Benefits … Continue Reading
The term “boilerplate” refers to standardized language in a contract that usually appears at the end of the agreement (often in a section titled “miscellaneous” or “general terms”). While boilerplate provisions are common clauses in a contract, they should always be checked carefully and tailored to the particulars of the situation as they will address … Continue Reading
Because most indemnification claims are made by a buyer, the seller seeks to limit its indemnification obligations. Some ways in which the indemnification obligations can be limited include: Materiality of breach or claim amount Caps on indemnification Baskets Payment adjustments for insurance proceeds or tax benefits Sellers often like to include materiality qualifiers in the … Continue Reading
Arbitration is an increasingly popular method of resolving disputes, but drafters of business contracts need to be aware that arbitration may not be suitable for every dispute. The question of whether or not to arbitrate often comes down to when you want to decide arbitration is right – before or after a dispute. Many people … Continue Reading
Back in August 2016, Delaware amended Section 262 of the Delaware General Corporation Law to address the rise of the appraisal arbitrage strategy where certain sophisticated investors would find a target company that is involved in a merger or acquisition, buy stock in the target company, and then invoke appraisal rights under Section 262. The … Continue Reading
Part One It is quite common for members of a recently formed LLC accustomed to a corporate governance structure (that is, one having directors, a board of directors and officers versus members and managers) to direct their attorney to draft their operating agreement so that the LLC will have a corporate governance structure too. The … Continue Reading
Effective for filings on and after Sept. 1, 2017, registrants will be required to include a hyperlink to each exhibit identified in the exhibit index of periodic reports, current reports and registration statements. For registration statements, the rule applies to the initial registration statement, and to each subsequent pre-effective amendment. The SEC adopted the final … Continue Reading
Most transactional documents include effort clauses as covenants to require a party to perform a certain act or acts to achieve a stated goal. These terms generally include the following: Best efforts Reasonable efforts Commercially reasonable efforts There are no universally accepted definitions or standards for interpreting these terms. As a result, their use can … Continue Reading
Imagine identifying an acquisition target that looks great on paper: strong earnings, efficient operations and good workplace environment. But after acquiring the target, a key employee leaves, taking with him or her key customers and suppliers. From day one, the newly acquired business is treading water due to the lack of business continuity after the … Continue Reading
In July 2016, Verizon announced it would buy Yahoo! for an unprecedented $4.83 billion. Several months later, Yahoo! disclosed two massive data breaches that affected 1.5 billion people, threatening to scuttle the agreement. Although Verizon recently finalized the acquisition, the hack forced Yahoo! to accept a $350 million reduction in purchase price. Within the last … Continue Reading
A non-competition agreement raises state-law public policy concerns. As a result, states often restrict the scope of non-competition agreements before they will enforce them. The protectable interests that states will recognize, the rules of construction that states will apply and the required elements of a non-competition agreement will vary from state to state. You may … Continue Reading
One of the most important things lawyers and clients should do in every merger & acquisition transaction is to read the documents, and be clear on the central facts of their transaction. This seems so profoundly simple and obvious that it seems that it would not need to be repeated. But a recent U.S. Tax … Continue Reading
Chances are that you or someone you know has been the victim of a data breach. The high number of cyberattacks and data breaches, now reported almost daily, calls attention to the importance of addressing these areas in the due diligence process in M&A deals. Whether a target company has had issues with cybersecurity breaches … Continue Reading
