The 4 Stages of Raising Startup Capital

While no two startup’s paths are the same, the road toward funding a startup tends to have certain steps and distinct stages. These four stages may have a variety of names for different businesses in the industry, but generally, are known as the following: Seed Stage/Seed Rounds Seed stage/seed rounds is the

Read More

Mergers and Acquisitions: Taxable Acquisitions & Tax-Deferred Reorganizations

This article will provide a brief overview of certain taxable transactions and the ramifications in M&A transactions, including those certain tax-deferred reorganizations under §368 of the Internal Revenue Code.  Often, due to the fact that the taxes are deferred under IRC §368, these M&A transactions are referred to as “tax-free.”

Business Formations & Incorporations: Professional Medical Corporations

In California, there is a general prohibition on the corporate practice of medicine, which includes a prohibition on operating a medical practice as a Limited Liability Partnership (“LLP”) as well.  However, there is an exception for professional medical corporations.  Professional medical corporations are growing increasingly popular as a business entity, and have become a go-to choice for both large and small practices.  For those individual practitioners who want to start their own business for their practice, but do not want to expose themselves to the liability of operating their business as an unincorporated entity, professional corporations can offer a good source of liability protection.  Professional corporations also work well for those who desire to operate their business through a more firmly structured and regulated entity as well.

Business Formations & Incorporations: Sole Proprietorships & Partnerships

Starting your San Diego business as a Sole Proprietor or General Partnership are some of the easiest business entities to form.  However, both of these business entities come with a serious drawback – being that the business owner has no protection from liabilities that arise from the operations of the business.  This means that if you are sued, or the business goes into debt, the business owner can be held personally liable for those debts.  There are different types of partnerships however, including limited partnerships and limited liability partnerships that can offer variable levels of liability protection.  

Business Formations & Incorporations: Corporations

Corporations are probably the most well-known of the business entities, as they provide limited liability to shareholders, easy access to raising capital through investors, are the only business entity that can go public through an IPO, and have a rigid management structure allowing shareholders to delegate the management of the corporation to directors and officers.

Business Formations & Incorporations: Limited Liability Partnerships

A limited liability partnership (LLP) is available as a business entity to only certain licensed professionals, which are public accountants, attorneys, and architects.  LLPs are a good alternative to general partnerships, as an LLP provides extended protection from liability that general partnerships do not.  This article provides a brief overview of the general structuring and operations of a LLP.

Business Formations & Incorporations: Limited Liability Companies

A Limited liability company (“LLC”) is a business entity that allows for liability protection for the equity holders, without sacrificing each individuals ability to participate in the management of the company.  Those that hold equity in the company are called “members” of the LLC, unlike corporations which have “shareholders.”  The equity a member owns in the LLC is often defined as a “membership interest,” or sometimes a “membership unit.” This articles provides a brief overview of LLC’s and their structure.

Securities Regulations: Exemptions Under Reg D & Limited Offerings

Under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), all securities must be registered unless an exemption applies to those securities.  This article will give a brief summary of Regulation D and the limited offering exceptions found within it.

Securities Regulations: The Intrastate Offering Exemption

Under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), all securities must be registered unless an exemption applies to those securities.  Section 3 of the Securities Act, on a very general basis, exempts specific securities from the requirement of registration with the Securities and Exchange Commission (the “SEC”).  This article will give a brief summary of the Section 3(a)(11) exemption, sometimes referred to as the “intrastate offering exemption,” as well as its safe harbor, Rule 147. 

Securities Regulations: An Overview

This article will give a brief overview of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Other federal securities regulations, such as Sarbanes-Oxley, the Trust Indenture Act, the Investment Company Act, and the Investment Advisers Act, will be discussed in Part 2, later.