Many value-added businesses raise business equity through equity offerings to a wide range of potential investors. The investors may just consist of the founders of the value-added business. Conversely, the investors may be all of the farmers who will patronize a value-added cooperative. Also, it may be farmers and other rural residents who will invest in the business. Regardless of who invests in the business, the selling of securities is a complex and serious business.
The Securities and Exchange Commission (SEC) has a significant impact on how value-added businesses can raise equity for a business venture. The rules are complex and require the assistance of legal help. This information will assist you in understanding the general concepts and procedures.
For more information on this topic, see the links listed below of articles posted on related Web sites.
- Going Public – Small Business Notes -- When your company needs additional capital, "going public" may be the right choice, but you should weigh your options carefully.
- Initial Public Offerings – CCH Business Owner’s Toolkit -- Going public simply means that a company that was previously owned by a limited number of private investors has elected, for the first time, to sell ownership shares of the business to the general public.
- Initial Public Offerings – Small Business Notes -- Initial public offerings (IPO) are often considered to be the ultimate goal for any entrepreneurial venture. Is an IPO really the right goal for your venture.
- Initial Public Offerings, the Basics – Lawyers.com -- Primarily used to raise investment capital, Initial Public Offerings (IPOs) and Direct Public Offerings (DPOs) may be a way of maximizing the return from the sale of your business.
- The ABCs of IPOs – Entrepreneur.com -- If you're thinking about launching an initial public offering for your company, this step-by-step guide to IPOs will familiarize you with the process. --
- Direct Public Offering – Entrepreneur.com -- Take your business—and your quest for funding—directly to the public by selling shares in your company.
- Initial Public Offering – Entrepreneur.com -- Ready for a whirlwind ride? Take the ultimate funding trip by going public.
- Employee Stock Offerings – CCH Business Owner’s Toolkit -- employee stock ownership plans that allow employees to own a piece of the business; can boost production and provide leverage for additional financing.
- When Employee Ownership Makes Sense -- Kent State University -- The mushrooming of employee ownership over the last decade is due in large part to the legal recognition of ESOPs in the Employee Retirement Income Security Act of 1974 (ERISA).
- Alternatives to Going Public – CCH Business Owner’s Toolkit -- Limited private offerings of ownership interests.
- Rule 504 – MoreBusiness.com -- As part of its program to simplify access to the capital markets, the SEC adopted the Small Business Initiatives ("SBI") in 1992.
- Reverse Merger – Entrepreneur.com – Take your private company public the easy way by purchasing a dormant, public company.
Securities and Exchange Commission Issues
- Small Business and the Security and Exchange Commission – Small Business Notes – There are two primary sets of federal laws that come into play when a company wants to offer and sell its securities to the public.
- An Introduction to the Federal Securities Laws As They Might Apply to Agricultural Operations – The National Agricultural Law Center - This article provides an overview of some of the ways in which federal law might impact the sale of "securities" by those in an agricultural enterprise.
- Security and Exchange Commission Exemptions – Small Business Notes -- Your company's securities offering may qualify for one of several exemptions from the registration requirements.
- SEC Registration Statements – Small Business Notes -- SEC Registration Statements have two principal parts.
- SEC Disclosures Required for Public Companies – Small Business Notes -- There are reporting obligations because of Securities Act registration.
- SEC Guidelines on Raising Capital – U.S. Securities and Exchange Commission -- A guide to help you understand how to raise capital and comply with the federal securities laws.
- Securities and Exchange Commission FAQ’s – Business.gov -- Answers to common questions about the Commission.