Case Study

Topics: U.S. Securities and Exchange Commission, United States, U.S. state Pages: 2 (310 words) Published: June 25, 2012

Jacqueline Short

Business Law 1

LS 311

May 21, 2012

Langley Brothers, Inc, is a corporation that is incorporated and doing business in the state of Kansas and decides to sell no par common stock worth $1 million to the public. The stock will only be sold in the state of Kansas. Joseph Langley says the offerings do not need to be registered with the Securities and Exchange Commission, but his brother Harry disagrees. Langley Brothers Inc., will definitely not have to be registered with the Securities and Exchange Commission. Non-investment company offerings up to $1 million in any twelve month period are exempt ( Miller & Jentz, 2010,2007, p569). Non-investment companies are firms that are not engaged solely in the business of investing or trading in securities (Miller & Jentz, 2010,2007, p569). An investment company is a firm that buys a large portfolio of securities and professionally manages it on behalf of many smaller shareholders/owners ( Miller & Jentz, 2010,2007, p569,570). Since Langley Brothers is offering stock of up to $1 million only, they are exempt from registration with the SEC. It is important for company executives to know these laws, because it can save them plenty of time and money. Also exempt are intrastate transactions involving public local offerings (Miller & Jentz, 2010,2007, p.571). This exemption applies to most offerings that are restricted to residents of the state in which the issuing company is organized and doing business ( Miller & Jentz, 2010,2007, p571). For nine months after the last sale, no resale may be made to non-residents, and precautions must be taken against this possibility ( Miller & Jentz, 2010,2007, p571).

Miller, R. L., & Jentz, G. A. (2010, 2007). Fundamentals of Business Law (8th ed.). Mason, Ohio, United States of America: South-Western Cengage Learning
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