Re: securities regulations
From: Martin Schafer (schaferanubis.network.com)
Date: Fri, 2 Dec 94 16:34 CST
> 
> 
> I'm a member of the Eno Commons Cohousing Group in Durham, NC - 
> 
> we've run itno a problem and would like to know if anyone has any
> relevant info or experience.  Our project manager, Sheri Rosenthal,
> has been advised by a lawyer that if we incorporate and then offer
> memberships to the public, that we will be, in effect, trading in
> securities, and would be subject to regulation.  What this could mean
> over the long run is that if someone who joined later became disaffected,
> he or she might have grounds for a very costly and ugly lawsuit.  
> 
> Any insight would be appreciated.
> 
> Louise Antony
>

Details of this will vary by state.  If you incorporate as a normal
for profit entity, the rules are very different depending on how
many "stockholders" (ie members, or owners, people who have rights
to the assets of the corporation) you have.  I believe the magic
number is somewhere between 10 and 20 most places.  Most of what
you need to be worried about  only comes up if you cross that number
of stockholders limit.

Martin

Results generated by Tiger Technologies Web hosting using MHonArc.