Business Law
| The Intrastate Offering Exemption from SEC Registration Requirements |
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| Securities may be sold without first being registered with the Securities and Exchange Commission if one of several exemptions applies. An exemption does not allow the use of any false or misleading statements in the offer or sale of the securities, and the offering may still be subject to requirements under state laws. However, if an exemption is applicable, then the expense and burden of the initial registration and periodic reporting of substantial information about the company may be avoided. More... |
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| Restrictions on Short Sales of Securities |
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| A short sale of a security is a sale of the security by an investor before the investor actually owns the security being sold. The investor profits if the value of the security declines between the time of the sale and the time of delivery of the security. Short sales may also allow an investor to lock in changes in value shares already held or to hedge against significant changes in value in securities. More... |
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| Regulation of "Penny Stock" Sales |
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| Rules issued by the Securities and Exchange Commission under the Securities Exchange Act of 1934 define and regulate "penny stocks." Penny stocks are defined in Rule 3a51-1 as unregistered stocks priced at less than five dollars issued by a company with net tangible assets of less than $2 million after being in operation for three years or less than $5 million after being in operation less than three years. More... |
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| Duty of Care |
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| A corporate director has the duty to act in good faith in pursuit of the company's best interests and to use the care that an ordinary prudent person in a like position would use under similar circumstances. The Model Business Corporation Act implies that corporate officers have an even higher duty of care because they are intimately familiar with and knowledgeable about the corporation's activities and have better access to corporate information than directors have. Most jurisdictions recognize that high-ranking corporate officers have a fiduciary relationship with the corporation.
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| Directors' Duty of Care |
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| The duty of care requires a director to make business decisions in the best interests of the corporation in good faith, with due diligence, and with the skill and judgment of an ordinary person under the circumstances. Claims for breach of the duty of care that involve a failure to act typically allege that directors did not adequately supervise corporate executives or key employees. More... |
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