The Securities and Exchange Commission (SEC) established Rule 701 to allow companies to issue stock options without the time & expense of registering the stock under the Securities Act. If a startup company is issuing stock or stock options, securities laws require those assets to be either registered or exempt from registration. Most private venture-backed … Continued
Category: Rule 701
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The majority of companies use Rule 701 to distribute employee stock. It’s a federal exception that permits private corporations to give workers up to $10 million in stock without having to make lengthy disclosures. Startups and small businesses who wish to issue stock but can’t afford pricey accountants or attorneys would benefit from Rule 701. … Continued