Can private placement be made to existing shareholders?

Yes. A private placement can be made to existing shareholders. A private placement is a form of financing by which securities are sold to a limited number of investors. This can include existing shareholders. In fact, it's common for companies to sell shares directly to their existing shareholders, often as a way to reward them for their support and commitment.

For example, if you own 1,000 shares of stock in your company, and an agreement has been reached with a new investor to pay $20 per share for 1,000 additional shares, it may be an option to sell you 300 of the new shares at $20 each as well. That way, you'd get the same payout of $6,000 in cash (300 x $20) that the new investor would receive. You'd still have the same percentage ownership in the company after the transaction (1/5 x 100%), assuming that all shareholders followed suit by selling off a portion of their own holdings.

Private Placement Attorney Free Consultation

It's important to keep in mind that this type of transaction usually occurs only when the company is looking for more capital (money) to expand its business.

When you need legal help from a private placement lawyer, please call this law firm below. They can help you:

Ascent Law LLC

8833 S Redwood Rd Ste C

West Jordan UT 84088

(801) 676-5506

https://g.page/AscentLaw

https://www.ascentlawfirm.com/are-private-placements-exempt-transactions/

 

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