Having a corporate lawyer available to answer questions can make a major difference in how you run a company. It's a good idea for everyone in the business world to know when they should turn to a securities law attorney for guidance. This article will address 4 examples of the right moments to involve a securities lawyer in your business matters.
Changes Big and Small
Virtually all restructuring efforts in a company should be undertaken only with the advice of counsel. This includes mergers and acquisitions, modifications to corporate structures, and starting up and even ending a business. Failing to have a corporate lawyer present may present problems with company offices, stakeholders, creditors, and other parties. Likewise, some changes to a company may simply not be allowed under the circumstances.
Distributions and Dividends
Any time a company plans to pay out shareholders from its coffers, it's essential to have a corporate lawyer involved. Payments are considered privileged information, and letting that knowledge float around unrestricted can give rise to accusations of fraud or insider trading. All stakeholders need to be aware of blackout periods when they're not allowed to discuss the topic.
Selling shares in a business can also be a tricky proposition. The first question any investigator is going to ask is, "What did you know, and when did you know it?" If a company is close to issuing a highly positive or negative report, selling shares around that time may be seen as fraud. Even if you have zero doubts about your situation, it's prudent to ask a securities law attorney for guidance.
Over the life of any business, there are going to be disputes about how it should be run and who should run it. These disputes have the potential to grow into full-on shareholder revolts. In such circumstances, the revolting shareholders may need to have counsel there to advise them on procedures aimed at installing new corporate governance. This often entails bringing in outside counsel.
People tend to think of securities law as applying mostly to public, stockholding businesses. However, virtually any for-profit organization that makes representations to current or potential investors is subject to securities laws. While these firms generally face less strict reporting requirements, even the leanest start-up on the planet has legal responsibilities to its investors. Sit down with a corporate lawyer to discuss a topic if there's the slightest chance someone will misinterpret your intentions.
For more information, contact a local firm like Carter & West Law.