Using a PPM reduces risks of personal liability when bringing on investors


Under state and federal securities laws, owners and managers of companies raising capital through sale securities (e.g., stock or membership interests in companies) can be personally liable for material misrepresentations and omissions in any description of the business or investment.

To reduce the likelihood of any personal liability, companies selling securities should utilize a private placement memorandum (PPM). A PPM provides companies (and their ownership and management) with proof that…

Previous It's not what you make when you invest, it's what you keep
Next 3 signs your lending relationship may not be working