Securities Law FAQs

Answers to Questions about Securities in the U.S.

What are the reporting obligations for a public company?

Any company that has registered securities pursuant to the Securities Act is required to file annual, quarterly, and current reports. In addition, companies that have more than 500 shareholders and more than $10 million in assets are required to file these reports. There are rules that apply in other situations as well (i.e., issuance of securities in a merger, foreign private issuers, etc.).   

Whitley Law Group, P.C. helps clients prepare and file all required reports. 

What information must be included in a required report about a public company?

Public companies must report information about operations, financial conditions, market position, material terms of contracts, information about officers and directors and certain shareholders that transact in particular ways with the company.

Whitley Law Group, P.C. assists public companies in meeting reporting requirements.

What regulatory approvals does a company need to offer securities?

A company cannot sell securities in the U.S. without having a registration statement declared effective by the Securities and Exchange Commission. The heart of the registration statement is the prospectus, which must be provided to potential purchasers when an offer to purchase securities is made. Companies—and their officers and directors—are liable for the truthfulness and completeness of offers, disclosures, and other reports or filings.

How can a company raise substantial funds without going public?

Many companies can raise money through private offerings. Private offerings are limited by the number and sophistication of purchasers participating in the offering.

There are many different types of private offerings, and the type appropriate for a company depends on many factors.

Whitley Law Group, P.C. can help you decide if a private offering is right for your company.

How do state securities laws add to corporate responsibilities under federal securities law?

State securities laws regulate how corporations sell securities within a certain state.  

Securities that are exempt from federal laws are not necessarily exempt from state laws.

Are all companies subject to the same securities laws?

Even if a company is exempt from certain federal laws and has verified its compliance with state securities laws, sales of securities are still likely to be subject to all anti-fraud rules.  

Whitley Law Group, P.C. advises U.S. and international corporations on all aspects of compliance with all relevant securities laws.

What laws apply to investment funds?

The Investment Company Act of 1940 applies to “investment companies.” Generally, an investment company is a company which is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, or that has 40% of its assets invested in securities.

The Investment Company Act imposes both disclosure and substantive structural and operational requirements on investment companies.

However, there are several exemptions from the Investment Company Act, the most important being an exemption for companies with less than 100 shareholders.

Whitley Law Group, P.C. works with sponsors of investment companies and private investment funds to determine the appropriate Investment Company Act status, comply with applicable requirements, and prepare disclosure documents.