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Technology & Entrepreneurial Ventures Law Group, P.C.
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Published for the Clients and Friends of Zegarelli Associates Professional Corporation


Zegarelli Associates is pleased to announce that, on March 20, 1995, it opened its office in Chicago, Illinois. Members of the firm now have the ability to practice law in the Commonwealth of Pennsylvania, the State of Illinois and the District of Columbia. Individual attorneys, rather than firms, are licensed to practice law; therefore, to the extent necessary, please coordinate your business ventures with the appropriate licensed professional.

Of course, we will continue to represent our Pennsylvania clients nationally and internationally, but now we have the ability to originate business ventures from Illinois. In addition, we will not be required to obtain local counsel for work performed for our Pennsylvania clients in Illinois.

The office in Chicago is located at 125 South Wacker Drive, 300 Northern Trust Building, Chicago, IL 60606-4591, which is next to Sears Tower. The telephone number is (312) 251-1222.

Certainly, the most often asked question is "why Chicago?" The reason is basic. It is a long-term investment into the growth of the firm and the sophistication of our entrepreneurial law practice. Chicago is a dynamic business and cultural center—much like Pittsburgh.

But, now that we’ve got Chicago, the better question is, "what’s next?" We’ll let you know soon, and you are going to like it.

Like you, we represent the entrepreneurial spirit.

Comply or Die

One of the most common challenges for a growing business is obtaining the operating capital necessary to fund the growth of the business. This is true for larger and smaller companies alike. The only advantage for a larger company is that it presumably has a network of professionals and business from which to seek funding in the private market. Following is the executive nutshell summary of points you need to know about seeking investment capital:

1. Public v. Private. A corporation is a corporation. IBM and Mom&Pop, Inc. both generally incorporate under the same law. But, IBM is a "public company" because it sells interests in itself or its ventures (i.e. its "securities") publicly on a securities/stock exchange like the New York or American exchanges or NASDAQ. Such sales are called a "public offering."

Mom&Pop, Inc. is a "privately-held" (also "closely-held") company because it does not sell interests in itself or its ventures on a securities exchange. If Mom&Pop, Inc. seeks capital from friends, this is called a "private sale" or "private placement." The sale is considered "private" even though the offer must be necessarily "publicized" to a limited extent to the potential investors/friends. General Rule: You will absolutely know if you own a public company. Therefore, you probably own a privately-held company making a private placement.

2. Which Law. Offers to sell securities by a business to residents of its local state are "intra-state" and usually must only comply only with the local state securities laws. Offers by a business to residents of a remote state are "interstate" and usually must comply with federal law, the local state law and the law of each state where any offer is made. General Rule: Whenever possible, get all investors from your local state.

3. The Law. All offerings and sales of securities must be registered with the government, unless there is an exemption from registration based upon your facts. General Rule: You can probably find an exemption from registration.

4. What is a "Security." This is key. As an appropriately conservative general rule, a "security" is commonly stock in a corporation, any business loan (even if you try to identify it as a personal loan), interests in a limited partnership, or any investment in a business venture in which the investor does not actively participate. General Rule: If you think your facts identify a security, it probably is; otherwise, it could be. Better check.

5. Exemptions. There are two kinds of exemptions: "non-self-executing" and "self-executing." "Non-self-executing" means you must file an application with the government to claim your exemption. This is not the same as filing a registration. "Self-executing" means the exemption is automatic without any filing. There are many exemptions from registration, most of which are complex and must be coordinated with your particular offering facts. For example, many exemptions prevent written advertisements, mass-mailings and finder fees. General Rule: Most attorneys do not practice securities law because of its complexity. Neither should you. The best advice is for you to call us to discuss your objectives and facts.

6. Always Disclosure! Always! This is the most overlooked aspect of the law. Whether or not your offering is registered or exempt, you must provide the investor will all information necessary for the investor to make an educated decision regarding the risks of the investment. Business plans generally are not acceptable disclosure documents—be careful how you use a business plan. General Rule: You must disclose the following: 1) the business market; 2) the company history; 3) management personnel history; 4) use of proceeds; 5) terms of the offering; 6) financial status of the company; 7) material litigation; and 8) anything else that might affect the decision of the investor to make the investment.

Securities law is complex and highly regulated. Please call us during your private planning stage, prior to making any offer to anyone. There are severe civil and criminal penalties associated with making even an innocent mistake. Keep your deal clean, and it will certainly pay off later.


At a recent meeting, the firm was explaining the incidents of various forms of business. I.e. the balance of reputation versus risk. We created a short table, which will hopefully assist you in reviewing your opportunities for growth. The table is provided below.


We cannot express enough our thanks to our clients and other friends who have contributed to the growth of the office, through referrals and otherwise. The staff at Zegarelli Associates works very hard to ensure that our clients are satisfied with our services.

We sincerely appreciate our relationship with you.

As always, please call us if you have any questions or if we can be of assistance to you in any way.

Forms of Business Table:



Indep Representative



Independence Business risk. Not independent, you manage No business risk. Independent business, but some control in IR contract No business risk. Independent business, but some control in license agreement No business risk. Independent business, but some control in franchise agreement
Duty of Payment You must pay on regular payday (W-2), but you keep excess You pay commission on actual sales only (1099), you keep excess Licensee pays royalty and keeps excess Franchisee pays royalty and keeps excess
Privity of Contract You contract with customer You contract with customer Licensee contracts with customer Franchisee contracts with customer
Business Identity Your identity IR’s identity primarily Licensee’s identity Your identity

Contact us today!  Our firm can assist you with understanding and applying the law to your particular situation.  We Represent the Entrepreneurial Spirit®If you would like to obtain our other firm publications, please go to our mailing list page.

Articles and information are for general information only, and often address issues, without expressly indicating, in generalizations. Laws vary between and among jurisdictions.  You should not rely upon any information provided by or on the website, including articles, as applicable to your particular situation. The law, filing fees, etc., change often, so the information in this document may not be current. The laws of various jurisdictions may be different than provided here.  Please contact us at info@zegarelli.com if you are interested in becoming our client--only then would this office be in the position to provide advise with regard to your particular situation.  It is important for you to review Terms of Use.

Unless otherwise specified above, Copyright © 2004,2008 Technology & Entrepreneurial Law Group, PC. All rights reserved.

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