SEC Amends 506(c) Accredited Investor Verification
In 2021, one of the SEC amendments updated the accredited investor verification requirements under Rule 506(c), which is a common federal exemption utilized by startups to broadly solicit capital from accredited investors.
QSBS Planning for S Corps Under Section 1202
Many early-stage companies elect S corporation status to take advantage of the favorable tax treatment. However, as companies scale and plan for funding or an eventual exit, they often convert to a C corporation to qualify for the QSBS exclusion under Section 1202. This article explains the challenges S corporations face when looking to convert, and outlines the strategies that can help founders satisfy the requirements under Section 1202 and preserve eligibility for the tax exclusion at exit.
Texas Data Privacy & Security Act
This blog focuses on the Texas Data Privacy and Security Act (TDPSA) which establishes new consumer privacy rights and imposes data security obligations on qualifying businesses, effective July 1, 2024. If you conduct business in Texas or handle Texas residents’ personal data, it’s essential to understand these requirements and take steps to ensure compliance.
When is a Stock Sale not a Stock Sale? When it’s a Section 338(h)(10) Sale
This blog discusses the differences between an acquisition structured as an Asset Sale versus one structured as a Stock Sale, as well as the Section 338(h)(10) election, which is used when the Buyer needs the transaction to qualify as a stock sale, but wants the advantages of asset sale tax treatment.
A Security is used to describe a tradable asset of any kind and generally represents an interest of equity in a company. Stock, membership units, and convertible notes are all forms of a security.
The Securities Exchange Act of 1934 regulates the sale of securities on secondary markets. The Act created the SEC and tasked it with regulating the securities markets. In order to protect investors and to provide transparency, stock exchange markets, brokerage […]
The Securities Act of 1933 was the first federal legislation regarding the registration of the sale of securities. The Act’s extensive registration and disclosure requirements allow potential investors to have all relevant information needed to make informed investments.
Unsecured Debt is debt that is not backed by collateral in any of the assets of a company. Since the debt is not secured by any specific assets as collateral, any debt secured by specific collateral will take priority over […]
A Trade Secret is any confidential business information which provides a competitive advantage. Trade secrets are often protected by contract law but are also protected by federal and state statutes. Examples of trade secrets include sales methods, distribution methods, advertising […]
A Security Interest is a legal right in collateral given to a creditor. If the debtor fails to fulfill its obligations to the creditor, the creditor can force the sale of the collateral and collect what it is owed from […]