Law Commons^™

Incorporation And The Securities Acts, Daniel T. Murphy

Law Faculty Publications

ATTORNEYS, when advising clients regarding the advantages and disadvantages of incorporating a business, must carefully consider the applicability of the securities laws, state and federal, to the venture from its inception. If a business were run as a proprietorship or a general partnership, the principals could dispose of their interests in the business without consideration of the securities laws. The issuance of stock by a corporation to such individuals in exchange for cash or their interests in the business triggers the application of both state and federal securities laws. More importantly, however, the attorney must recognize that these statutes will …