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Corporate Finance

Corporate Lawyer in Michigan

Hoeg Law is a business law firm with years of experience helping companies through different stages of growth. This includes helping companies with their structure, governance, compliance with regulations, corporate finance, and many other legal matters. Furthermore, with over a decade of experience working at a large law firm, Richard Hoeg provides clients with extensive legal expertise at a fraction of the cost that large firms charge. Therefore, when working with Hoeg Law, you can expect big firm caliber work with a personalized, small firm approach.

If you, or your company need assistance with matters related to corporate law, financing, or business law in Michigan, call for a free consultation today.

Corporate Finance

When starting or making a major change to a company, business owners often have many questions. These questions include, but are not limited to:

  • How do you capitalize your business?
  • Do you take on debt?
  • Should you take on debt from friends and family, or from institutions?
  • Do you issue equity? If so, what are the terms?
  • How much control of your company should you give up?
  • How do you ensure compliance with securities laws?
  • Should you file federal notice forms or use a local exemption?

The details may seem daunting at first, and they certainly can be. Fortunately, Hoeg Law has helped structure and negotiate countless transactions from both sides of the equation.

For instance, we’ve helped memorialize a start-up’s promissory notes to the founder’s aunts and uncles. Moreover, we’ve helped venture funds negotiate the terms of a Series E follow-on round, and we’ve done everything in between. Furthermore, we’ve helped make sure that those same transactions were in full compliance with both federal and state securities laws. Thus, whatever side you approach the question, Hoeg Law can help.

Physical copy of Michigan corporate laws, specifically, the Michigan General Corporation Statute Act of 1931

Corporate Lawyer Questions (FAQ)

— What is a Corporation?

A corporation is a company or group of people authorized to act under a single entity. In essence, a corporation is a legal entity which is distinct from its owners. Corporations have specific laws and regulations they must comply with in order to continue operating under this legal entity.

Many people think of corporations as large fortune 500 companies in skyscraper buildings. While there are certainly large corporations such as these, small businesses can be corporations as well.

— What is Corporate Law?

Corporate law encompasses the legal side involved with the formation and operation of a corporation. More specifically, it’s a body of laws, rules, and regulations specific to corporate entities. This often involves financial aspects such as convertible debt, investors, shareholders, creditors, etc. It also involves legal obligations such as investor ownership, securities law, and various federal regulations to which corporations must comply with.

— What is the difference between corporate law and business law?

Corporate law is essentially a subset of business law. For instance, business law pretty much embodies any legal element associated with business. On the other hand, corporate law focuses solely on legal entities that are defined as corporations. In short, corporate law is a more specialized practice area.

— Why form a corporation?

The formation of a corporate entity provides several benefits for it’s owners. For instance, corporations offer limited liability protection. In other words, owners are not personally liable for debts and liabilities associated with the corporation. There are many other benefits to incorporating a business including:

  • Easy ownership transfers
  • Tax advantages
  • Raising capital through sale of stock

Corporate Law Representative Services

Promissory Notes – Simply put, these are written agreements from one party to pay another. This includes the sum of money, terms of the payment, maturity date, etc. These notes allow individuals or companies to receive financing from sources other than banks.

Angel Financing – We help entrepreneurs and companies with contracts and other details surrounding the financing of startup companies including angel investments.

Seed Rounds – There are many aspects involved with seed round funding. These aspects include: the amount of money, the number of investors, method of payment, and more. Hoeg Law helps business owners and investors with legal details around seed round funding.

Securities Law (Blue Sky) Compliance – Securities Law is enforced at the federal level in order to protect investors. On the other hand, each individual State has its own set of “Blue Sky” laws that are enforceable at the local/State level. In Michigan, these laws are referred to as the Michigan Uniform Securities Act. Hoeg Law helps Michigan small business owners ensure they’re compliant with these laws.

Regulation D (Rule 506(b)) – Rule 506b of Regulation D, provides exemptions for companies offering and selling securities. According to the SEC, “Under Rule 506(b), a “safe harbor” under Section 4(a)(2) of the Securities Act, a company can be assured it is within the Section 4(a)(2) exemption by satisfying certain requirements” (U.S. Securities and Exchange Commission, Rule 506 of Regulation D, 2017)

Regulation D (Rule 506(c)) – Simply put, Rule 506c of Regulation D allows a company to advertise their securities offerings provided that several requirements are met. These requirements include: all purchasers must be accredited investors, the issuer takes reasonable steps to verify purchasers’ accredited investor status, and other conditions in Regulation D are met. (U.S. Securities and Exchange Commission, General solicitation Rule 506(c), 2017)

Crowdfunding Exemptions – Certain requirements must be met to qualify for the Regulation Crowdfunding exemption.

Preferred Stock Terms – We help clients with various aspects of angel investing including the negotiation of preferred stock terms.

Convertible Debt – We help founders and investors work out details behind the funding of startup companies. This may include debt obligations, equity, stocks, loans and more.

Investor Rights Agreements (IRA) – An Investor Rights Agreement or IRA, is a standard document between venture capitalists and other parties in regards to financing a startup company.

Authorizing Resolutions – This document is required by local governments to approve issuing securities.

Charter Amendments – Amendments to the charter documents of the corporation or company. These documents can vary based on the individual State. For example, in Michigan this would be the the Articles of Incorporation/Organization; in Delaware this would be the Certificate of Incorporation/Formation.

Subordination – Lending documents require a party to subordinate their rights to a more institutional lender.

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