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How to Register Private Placement Memorandums
USINFO | 2014-01-07 13:54
A private placement memorandum (PPM) is a confidential document outlining the financial, demographic and economic characteristics of a borrower to present to a potential investor to secure bonds. Investors receive risk information, company structure information and financial data for the company. A PPM must be registered with the U.S. Securities and Exchange Commission within 15 days of the first securities sale to be legal.
Instructions
Contact a securities lawyer to begin the paperwork process. The first step is to draft a prospectus to present to a potential investor. These drafts can be quite lengthy as much information regarding the company, its financial situation, management, risks and other assets are discussed. This prospectus is made available to any potential investor to review.
Draft a second document listing additional information about the company. This document does not need to be shown to investors, but will become public record and therefore available should an investor wish to view it.
Complete Form S-1 as a readable, brochure-type form, not as a tax return form where you just fill in the blanks. Include with Form S-1 financial statements issued by a certified accountant. Also include information to prove the business is legitimate and the documents are not misleading, such as lack of a market for securities, personnel issues and little business operating history.
Register all the documentation with the SEC. The SEC will then review the forms and make the information publicly available. If the SEC determines there are holes in the information provided or have additional questions, they will follow up by letter. Once the memorandum is approved, the company can begin to sell securities to investors.
Tips & Warnings
All company financial information needs to be checked by a certified accountant before submission to ensure it is error free.
Instructions
Contact a securities lawyer to begin the paperwork process. The first step is to draft a prospectus to present to a potential investor. These drafts can be quite lengthy as much information regarding the company, its financial situation, management, risks and other assets are discussed. This prospectus is made available to any potential investor to review.
Draft a second document listing additional information about the company. This document does not need to be shown to investors, but will become public record and therefore available should an investor wish to view it.
Complete Form S-1 as a readable, brochure-type form, not as a tax return form where you just fill in the blanks. Include with Form S-1 financial statements issued by a certified accountant. Also include information to prove the business is legitimate and the documents are not misleading, such as lack of a market for securities, personnel issues and little business operating history.
Register all the documentation with the SEC. The SEC will then review the forms and make the information publicly available. If the SEC determines there are holes in the information provided or have additional questions, they will follow up by letter. Once the memorandum is approved, the company can begin to sell securities to investors.
Tips & Warnings
All company financial information needs to be checked by a certified accountant before submission to ensure it is error free.
