Financing your Business - Legal Aspects




Financing a Business. When starting any business, obtaining financing can often be one of the most important and challenging tasks. There are many ways for businesses to obtain start up capital or operating funds, but many of these options include legal consequences that business owners often fail to consider in advance.

What kind of financing is right for your business? From angel investors to crowdfunding, to loans and stock sales, there are a multitude of different funding options available. But, some require the business to give up a portion of its ownership and control, some require strict adherence to strict regulatory rules, and others may have significant financial consequences.


Financing Your Business

  • Business Financing FAQ

    Some of the most frequently asked questions about raising money for your small business.

  • Business Financing Options

    Information about forms of business financing for an initial investment or to solve financial problems of companies looking for finance to grow or those that are going through a bad phase financially.

  • Financial Assistance - SBA

    The U.S. Small Business Administration (SBA) provides business loan information for borrowers and for prospective lenders.

  • Financing & Funding

    Explore a variety of funding alternatives, including self-funding, angel funding, venture capital, grants, conventional loans, and special loan programs spsecifically for small businesses.

  • Resources to help entrepreneurs plan, start and finance small businesses
  • Small Business Guide to Government Grants and Loans

    The U.S. government does offer a wide-variety of low-interest loans and venture capital financing programs to help entrepreneurs start and grow their businesses.

  • Small Business Loans & Grants

    Federal, state and local governments offer a wide range of financing programs to help small businesses start and grow their operations. These programs include low-interest loans, venture capital, and scientific and economic development grants.

Articles Related to Business Finance

  • When a Business Folds, Who Is Responsible for Its Debts and Other Obligations?
    A common question among small business owners is who will be responsible for debts and other obligations if a business entity folds or reorganizes. Many things can happen in the life of a business entity, whether a corporation, LLC, partnership, or sole proprietorship, and this can lead to questions about who will be left holding the bag.
  • The Fallout of Arthur Andersen and Enron on the Legal Landscape of American Accounting
    It may have been a decade ago, but the fallout of the accounting scandals of the late 1990's and early 2000's continue to resonate through both of the accounting and legal professions. The largely self-regulated accounting profession has enacted numerous changes that continue to evolve in response to the scandals and pressure from government agencies and the public.
  • Crowdfunding, Crowdinvesting, Kickstarter, and the JOBS Act
    In 2012, the US federal government passed a bill called the JOBS act. Among its provisions was one allowing for small investments in exchange for equity in that company or project without having to go through the SEC or qualify as an investor. What is the difference between crowdinvesting and crowdfunding, what is Kickstarter, and how does it all work from a legal standpoint?
  • Transfer Agents in the Going Public Process
    Transfer agents play a key role in the going public process. Transfer agents are the record keeper for a company’s securities when it goes public. Share ownership is reflected on the issuer’s shareholder list. In addition, transfer agents issue and cancel certificates to reflect changes in the ownership of securities and act as an intermediary for the company and its stockholders during the going public process.
  • Accredited Investors l Rule 506 Requirements
    Regulation D under the Securities Act of 1933,as amended (the “Securities Act”), sets forth a safe harbor from the registration statement requirements of the Securities Act for certain private placements of securities. In connection with these exemptions, offerings made in reliance upon Regulation D, Rule 504, 505 and 506 can be made to up to 35 non-accredited investors and an unlimited number of “accredited” investors.
  • Section 4(1) Exemption
    Rule 144 (“SEC Rule 144”) under the Securities Act of 1933 (“Securities Act”) provides a safe harbor from the registration provisions of the Securities Act for resales of restricted and control securities by persons other than the issuer if all conditions of the rule are complied with.
  • Form 8K Reporting of Reverse Mergers
    The Securities and Exchange Commission (“SEC”), Division of Corporate Finance frequently notes disclosure deficiencies in the disclosure of reverse merger transactions in on 8-K Filed. This post summarizes SEC staff comments in response to reports on Form 8-K reporting of reverse mergers with public shell companies or similar transactions that result in a public company no longer being designated as a shell company.
  • US Listings For Foreign Issuers
    Typically, foreign companies seeking to raise capital attempt to obtain public company status. Foreign companies that go public in the U.S. may complete a public offering by registering securities with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) or by registering a class of securities under the Securities Exchange Act of 1934 (the “Exchange Act”).
  • OTCMarkets OTCQX l Dual List USA
    The OTCMarkets OTCQX offers foreign issuers seeking to go public in the U.S. an appealing alternative to listing on a stock exchange. Foreign issuers whose securities are listed on a foreign stock exchange that qualify for the exemption from the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
  • Private Placement Memorandums 101
    A private placement memorandum (“PPM”) is also referred to as a confidential offering circular or memorandum. PPM’s are typcially prepared by securities lawyers who assist private companies with their going public transactions. PPM’s are used to raise capital by selling either debt or equity in an exempt offering that has not been registered with the SEC. These exempt offerings are often called private placements.



Contact a Lawyer

Find a Local Lawyer