Securities Regulation Law
What Is a Security?
The term “security” is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in an entity—via stock or similar certificate—a creditor relationship with a governmental body or a corporation—represented by owning that entity’s bond—or rights to ownership as represented by an option.
Securities can be broadly categorized into equities and debts, and hybrid securities that combine elements of both equities and debts. Equity represents ownership interest in an entity. Debt represents money borrowed and must be repaid according to terms. Hybrid securities can start as one or the other.
Am I Offering a Security?
Any time an Issuer or Operator raises capital by pooling Investors and offers a return based on the efforts of the Issuer, it will be deemed a security and the Issuer will be required to register unless there is an exception or exemption.
Ehlert & Associates assists client in capital formations by determining if clients are offering a security, and if they qualify for an exception or exemption to avoid costly registration.
We assist Operators raising money by drafting and refining offering packages.
Operator’s offering packages typically include a Private Placement Memorandum (a “PPM”), business plan, investor questionnaire, and subscription agreement. Operators may sometimes have a “deck” to use as a marketing tool to share information in a presentation to interested parties. A deck typically summarizes information in the PPM and business plan. Even small, simple capital formations require extensive work and start at $18,000 initial retainer.
We assist Investor by reviewing offering packages and assist in their decision making process.
Investor representation starts with interviewing the client to gain an understanding of their objectives, reviewing the offering package, then writing up our findings. This is a comprehensive process requiring a $2,200 initial retainer.