BizTech Law Blog

Note: This post is Part 1 of a multi-part series regarding Michigan's new crowdfunding law

It's official, crowdfunding is legal in Michigan. So, what does that mean for your business? Let's start with the basics.

Federal and state law prohibit a business from selling a security unless: (A) the security is registered with the SEC, or (B) an exemption from registration is applicable. Registration is expensive, so nearly all businesses try to satisfy an exemption from registration. Historical exemptions have made it difficult for businesses to receive investment from "non-accredited" investors and flat out prohibit "general solicitation" (i.e., public advertising of the investment, including advertising on the Internet). Those historical difficulties, however, have recently been eased.

Posting of Issuer Disclosures. In prior blog posts, we described the disclosure obligations imposed on the issuer (the company that is raising capital) under the SEC's proposed crowdfunding regulations. (Read: The SEC Crowdfunding Proposed Regulations: Overview of Offering Statement & Non-Financial Disclosure Requirements and The SEC Crowdfunding Proposed Regulations: Overview of Issuer Financial & Disclosure Requirements). The proposed regulations impose certain requirements on the funding portal to make sure that these issuer disclosure obligations are met. Specifically:

We have all seen patent numbers marked on all kinds of products. In fact as I sit and write this article I can report that there are several items in my office with patent markings including my hole punch, stapler, Dictaphone and the insoles in my shoes.

So why is that? There has got to be a reason, right?

The reason is that if products are not appropriately marked before they enter the stream of commerce, the damages that the manufacturer can receive in a patent infringement action against someone that has copied that product are reduced. 35 USC §287(a) provides:

Business owners are increasingly turning to cloud storage as an alternative to maintaining their own servers. The three most popular cloud storage services are Dropbox, Google Drive and SkyDrive. Each service comes with a specific amount of free storage and allows users to upgrade for a fee. For a helpful comparison of these three choices, see here. Cloud storage providers are promising upgraded security, but there are certain steps business owners can take themselves to protect their data.