Distributable securities refer to equity securities that can be sold without restrictions under federal and state securities laws. These securities must meet specific criteria set by the Small Business Administration (SBA) and are typically evaluated with the help of a third-party expert in securities marketing.
Distributable securities are primarily used in the context of small business investment companies (SBICs) and investment practices. They are relevant in areas such as corporate finance and securities regulation. Users may encounter forms related to the sale or distribution of these securities, which can often be managed using templates available through resources like US Legal Forms.
Here are a couple of examples of abatement:
For instance, a company may issue shares that are listed on the New York Stock Exchange. These shares qualify as distributable securities since they can be sold immediately without restrictions.
(Hypothetical example) A small tech startup issues equity that meets all the SBA requirements for distributable securities, allowing them to attract investors without legal complications.
Distributable securities are governed by various federal laws, including:
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Specific regulations may apply to the sale of securities in private placements. |
| Texas | Additional state registration may be required for certain securities. |
| New York | Stricter disclosure requirements for securities sold to the public. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Marketable Securities | Securities that can be quickly converted to cash. | Marketable securities may not necessarily meet the SBA's criteria for immediate sale. |
| Restricted Securities | Securities that are not freely tradable. | Distributable securities must be salable without restrictions, unlike restricted securities. |
If you are considering investing in or distributing securities, ensure they meet the SBA criteria for distributable securities. You may want to consult legal professionals for complex situations. Additionally, explore US Legal Forms for templates that can assist you in managing the necessary documentation.
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They are equity securities that can be sold immediately without restrictions under federal and state laws.