Businesses require capital in order to grow and become successful. Whether your company wants to introduce a product, offer a new service or expand production, your biggest challenge is to find financing. One option is to offer an equity
stake in your company.
The most common form of equity is stock
. In exchange for the money they invest in your company, investors receive shares of stock representing their part ownership of your company. You can maintain control of the business by retaining a majority of its stock.
The offer and sale of either stock or debt securities are subject to state and sometimes federal law.
Generally, small businesses that want to issue stock or debt and do not quality for an exemption must register the security with the Department of Banking and Securities.
The application for registration requires that the issuer submit an offering document containing disclosure
of all material information about the company to potential investors. The business may not make offers or sales of securities in Pennsylvania until the offering has been cleared by the department.