Legal Question in Business Law in California

Re: Investment in company

Whenever you get involved in the solicitation of funds for a business, you have to be careful to make sure that you comply with Federal and State securities regulations. You should consult with a lawyer to make sure that you are either complying or exempt from compliance.

There are also many different ways for an investor to make funds available. This is another reason to consult with a lawyer to draft an agreement specifically tailored to the deal that you work out with your investor(s). For example, will they get equity, debt, or some combination of the two? What security will they have? What happens to the investment if the business fails?

Re: Investment in company

Any lawyer can draft a Memorandum of Understanding (MOU)for you.

Re: Investment in company

Based on the limited information given in your question, I'm guessing that your business is, in one form or another, selling securities. U.S. laws define securities very broadly, and there are detailed requirements which must be met by an issuer of securities, including full disclosure and in some instances registration.

While it is true that any lawyer should be able to write a simple memorandum of understanding to formalize a business relationship, I suggest you talk with a business lawyer with some experience in securities matters to be sure your financing meets federal and state requirements.

A little caution at the outset can prevent a lot of grief later on.