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 link below.
Securities and Exchange Commission Issues
- 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.
Revised May, 2019.