A legal blog on private funds, startups, and venture capital.
A legal blog on private funds, startups, and venture capital.
Section 3(c)(1) caps a private fund at 100 beneficial owners, but counting them is rarely as simple as counting subscription agreements. This practitioner's guide explains how the 10% and specific-purpose look-through rules work, who is excluded from the count, and how parallel funds and cross-border offerings affect the limit.
This advisory explains the Tennessee Securities Division’s new interpretation of the de minimis exemption and its interaction with custody rules, outlining key compliance options and risks for private fund managers.
On January 30, 2024, the Delaware Chancery Court voided Elon Musk’s $55.8 billion compensation package as CEO of Tesla, ruling it unfair to shareholders. In response, Musk criticized Delaware and announced plans to transfer SpaceX’s incorporation to Texas, with Tesla potentially following. This decision has sparked debate among business owners about incorporating in Delaware. Despite the controversy, Delaware remains a popular state for incorporation due to its established legal framework, specialized courts, and favorable regulations. The post explores the implications of Musk’s actions and the ongoing relevance of Delaware for business incorporations.
Earnouts can bridge valuation gaps in M&A deals, but careful drafting is crucial. Sellers should negotiate clear calculation methodologies, specific covenants for the buyer's post-closing operation of the business, and robust dispute resolution procedures. Proper structuring of earnout provisions can help manage seller expectations and reduce the likelihood of future disputes.
On January 1, 2024, previously enacted federal legislation called the Corporate Transparency Act (the “CTA”) went into effect. The CTA aims to assist law enforcement in tackling money laundering, tax fraud, terrorism financing, and various other illicit activities facilitated by…
The purchase agreement is key in M&A transactions, detailing conditions for closure, business terms, asset delineation, due diligence, post-closing recovery, and transition covenants. Styled based on the transaction (asset, stock, merger), it's drafted post-due diligence, varying in length. It includes parties involved, assets, liabilities, purchase price details, closing process, representations, warranties, tax matters, other covenants, indemnification, and miscellaneous provisions. Structure is driven by buyer and seller preferences, affecting asset or stock purchase decisions and tax implications.
