A Private Placement Memorandum (PPM) is a document that outlines the terms of securities to be offered in a private placement. A private placement is the issuance and sale of a company’s stock to a small number of select investors and is utilized as a means of raising capital; private placement is the opposite of a public issue, in which securities are available for sale in the open market. A PPM resembles a business plan both in its content and in its structure, except these documents tend to be lengthy and extremely thorough, are broken into several components — one of which is a business plan — and are most commonly used in business to provide information to potential investors, so that they may evaluate the merits of an investment in the company.

While the content of a PPM might vary based on the particular offering or the circumstances of the company, most PPMs typically contain the following elements:

• A complete description of the security being offered for sale, including the terms of the sales and the associated fees;
• A description of the issuer which includes organizational structure, the history of the company and the context of the offering;
• A detailed business plan providing information related to market opportunity, the company’s value proposition, its products and/or services, marketing and sales plans, management, financials, and proposed use of proceeds;
• Detailed instructions on how to participate in the offer;
• A summary of relevant or possible conflicts of interests with the issuer, its principals, its affiliates, or a combination of any of the foregoing;
• The numerous risk factors associated with the investment, including risks that are common to similar investments and those risks which are unique to the issuer and its securities.

In certain contexts, particularly if securities are being offered to prospective investors who lack accreditation (unaccredited investors are less sophisticated investors who do not meet the net worth requirements under the SEC’s Regulation D and require special protection when buying stock), a PPM will be required by law. If this is the case, the contents of the PPM will be subject to and regulated by the disclosure requirements of applicable securities regulations, inclusive of state blue sky laws.

Even when a PPM is not required by law, it can provide an invaluable amount of protection for the issuer. For example, statements of an issuer, whether they are written or oral, are subject to both federal and state anti-fraud laws. Among other possible actions, a well-prepared PPM can help issuers avoid a potential securities fraud claim. The PPM will establish a record of exactly what was communicated to the investors about the offering as well as the company, and what was subsequently accepted.

Our business attorney have decades of corporate law experience in private placement and can help you navigate through the regulatory requirements and draft your private placement memorandum.

For more information contact our firm:

Spotora & Associates, P.C.
(310) 556-9641
1801 Century Park East, Floor 24
Los Angeles, CA 90067

Music publishing offers artists a way to gain recognition and compensation for their work. Knowing your rights can make it easier to enter into a publishing agreement which can then help secure that deserved credit and desired remuneration.

In the music industry, protecting your rights can be a tricky process; however, doing so is essential for artists to achieve success. Music publishing rights include the rights to market, value and distribute your original, creative music. Essentially, music publishing consists of finding different uses for a song, such as including it in film, television or video games, and collecting money for these uses in the form of a licensing fee.

Songwriters typically own copyrights in the music and lyrics that make up their songs and earn money through license fees or royalties from their commercial use. If someone wishes to use a songwriter’s material, then he or she must obtain permission from the copyright owner in the form of a license; based on the type of agreement entered into, that copyright owner may no longer be the songwriter or artist.

Many songwriters agree to give up a portion of their publishing rights by entering into a contract with a music publisher. In giving up these rights, the musician usually gains publishing services and cash advances. The publishing company then proceeds to find uses for the songwriter’s music and takes on an administrative role, protecting copyright, licensing songs to record companies, and collecting royalties on behalf of the songwriter.

Agreements entered into by the publisher and the artist can take several different forms. A co-publishing agreement is when the songwriter and the songwriter’s publisher jointly own the copyrights in the song. Alternatively, in a songwriter agreement, the songwriter agrees to transfer all of the copyrights to the publisher. Finally, administration agreements are those in which the songwriter retains the copyrights in his or her song, and the publisher administers the copyrights for the songwriter for a specified amount of time, while receiving an administration fee in return for its services.

If a songwriter is offered a publishing contract, he or she should consult with an entertainment lawyer to help review the proposed agreement, explain its terms, and work with the publisher to achieve the best possible deal for the artist.

Whether you are trying to obtain music or get it licensed for an artist, you should seek the advice of an experienced music publishing contract attorney who will make sure the contracts are proper and both parties follow the relevant laws.
 

The protection of intellectual property is a basic tenet in the U.S. legal system. The courts have long recognized that the creators of material eligible for copyright protection invest a great deal of time, effort and money to generate these ideas of the mind. They have a right to protect the commercial value of these ideas from theft or abuse by others.

A copyright can apply to artistic works, literary works, inventions, names, slogans, images, symbols, and designs that are, or are intended to be, used in commerce.

Intellectual property works generate public discourse by their very nature. People like to talk about newspaper articles, books, magazines, directories, movies, video games, and other commercial products that are covered by copyright laws.  The question then becomes, how much of the original work can be used by others without interfering with the legal rights of the copyright holder?

The “fair use” doctrine, contained in Section 107 of the copyright law, answers this question by identifying four factors that can be used in evaluating if a use is considered to be fair:

1.       Whether the usage is for commercial or educational purposes
2.       The nature of the original copyrighted work
3.       The portion of copyrighted material being referenced in relation to the whole
4.       The impact of the use on the value or market potential of the copyrighted material

These fair use guidelines can be difficult to interpret, which is why it is important to speak to a trained copyright attorney about your intended usage. Citing the original work itself is not always sufficient to qualify for protection under fair use laws, and your intellectual property attorney can provide guidance in compliance matters.

Gaining permission from the copyright owner to reference their work is the best approach to protect yourself against charges of copyright violation.

There are various reasons why business owners elect to incorporate and the privilege of limited liability is often at the top of their list.  It is important to remember, however, that it is in fact a privilege that’s granted and can therefore be taken away.  Business owners must recognize that it is called “Limited Liability” because their liability is just as it’s named to be – limited; not eliminated.

In order for a corporation’s directors, officers and shareholders to maintain the protection afforded them, it is essential that, amongst other things, corporate formalities are observed. What are corporate formalities?  They are formal actions that, by law, must be performed by the corporation’s directors, officers and/or shareholders on behalf of the corporation. Failure to observe and implement these formalities will not only diminish the protection afforded the corporation’s directors, officers and shareholders, but it can allow third-parties to “pierce the corporate veil” and subsequently hold those directors, officers and/or shareholders personally liable for what should have otherwise been corporate actions.

One formality that must be maintained is adequate corporate minutes.  It is imperative that significant corporation transactions, both internal and external, be properly documented. Failure to do so can serve as but one means for third-parties to “pierce the corporate veil.”  For example, undocumented officer compensation deemed by the IRS as excessive can result in a reclassification; amounts claimed as deductions can be viewed as dividends and consequently lead to increased, unpaid tax liabilities.  Infamous as well is the case for a plaintiff whereby it has become nearly commonplace to seek to hold both the corporation and its directors, officers and/or shareholders responsible for their claims.  Many times, they attempt to achieve this by proving that the corporation did not adhere to legal formalities such as its minute/record keeping.

Everything has its price but, the benefits received from investing some time into maintaining your corporation’s meeting minutes far outweighs the consequences you may endure by distributing that time elsewhere and leaving to chance the outcome of this legal requirement.