Can public companies do private placements?
Maybe. Call a lawyer to be sure. When you think of private placements, you probably just picture some huge corporation issuing stock to private investors. But the truth is that any company can do a private placement for any reason that it sees fit. There are no laws in place to stop this from happening.
Private placements are often the best way for a company to raise capital, so long as they aren't violating current regulations or any other rules regarding public or controlled companies. In general, a private placement is when an organization offers ownership interest to an investor or investor group without going through the process of registering their securities with the SEC (Securities and Exchange Commission).
Private placements might be available for public companies under specific circumstances:
-
If there is no public demand for the stock being
offered due to its unavailability in marketplaces
-
If a company is not ready to file financial
statements with the SEC because of its industry or location
-
If the company has only recently been
incorporated and has not yet been approved by regulators
- If the company has already issued qualified securities but intends to issue more shares than currently allowed by existing rules
When asking yourself whether your company should pursue a private placement, you need to first consider your options and find out what your legal obligations are.
Your next best step is to call a private placement lawyer. This firm may be able to help you - get your free consultation below:
Ascent Law LLC
8833 S Redwood Rd Ste C
West Jordan UT 84088
(801) 676-5506
https://www.ascentlawfirm.com/can-a-private-company-do-private-placement/
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