JOBS Act Article

Yesterday, CityBizList Dallas published an article I wrote about the JOBS Act which is available here.

As you can tell from the article, I think the JOBS Act is very good news for growing businesses seeking capital from either the private or public markets.  I suspect private offerings will be especially aided by the relaxation of restrictions on general solicitation with regard to Rule 506 offerings.  Of course, we'll have to see what the final SEC implementing regulation look like, but I think growing businesses will be pleased with the results.

Young Investors Wall Street Camp

Like many who grew up in the 1980's, my favorite television character was Alex P. Keaton, the economics-obsessed kid from the classic show "Family Ties."  I couldn't help but think of Alex when I heard that the Future Investor Clubs of America is offering the Young Investors Wall Street Camp at Rice University.  No doubt Alex would have relished an opportunity to "enjoy financial intelligence training, video and board games, field trips to local financial districts, and guest speakers from some of America's largest corporations."  The camp's website (http://www.futureinvestorsclub.com/camps-houston.cfm) says the kids will get a camp T-shirt. I couldn't find any mention of one of Alex's trademark argyle sweaters, however.

Trusts and Estates website

One of the neatest parts of practicing law at a firm like Cantey Hanger LLP is that I get to work with some pretty amazing attorneys.  One such attorney is Noel Ice, a recognized leader in the field of trusts and estates law.  Noel maintains a website named www.trustsandestates.net that has a tremendous amount of very useful information, including over 150 articles, memos, and other resources related to estate planning and probate materials generated by Noel over the last couple of decades. I encourage readers of this blog to check it out.

JOBS Act becomes law

On April 5, President Obama signed into law the Jumpstart Our Business Startups Act (the "JOBS Act").  The JOBS Act represents the most significant change to the law governing securities offerings since the Securities Act of 1933.  I'm sure I will be blogging about the JOBS Act quite a bit in the coming months as the SEC rolls out its new rules implementing the JOBS Act, but I thought I'd mention an aspect of the law I found most interesting today.

Many private offerings will soon no longer be private!  Let me explain.  Most private offerings of securities rely upon Rule 506 for its exemption from the registration requirements of the Securities Act.  Usually, Rule 506 offerings are made exclusively to accredited investors (investors with high incomes, high net worths, or both).  Rule 506 currently prohibits general solicitation (such as advertisements on television, radio, newspaper, etc.) to publicize the offering.  The JOBS Act requires the SEC to adopt rules permitting general solicitation connection with 506 offerings on so long as all of the purchasers of securities in the offering are accredited investors.  Hence, companies seeking capital will soon be able to publicly offer securities in a "private" offering!  These are interesting times to be a securities lawyer.

Little Known Facts: English First for Recording Instruments

With six flags having flown over Texas and numerous foreign languages spoken in this state, one might wonder if property can be conveyed and recorded in a language other than English.  While parties may be able to agree to convey property in a language other than English, a deed or any other instrument relating to real or personal property cannot be recorded in Texas unless it is written in English.

Section 11.002 of the Texas Property Code provides that "an instrument relating to real or personal property may not be recorded unless it is in English or complies with this section." That statute identifies only two exceptions to the English-only rule for recording instruments in Texas, each of which require that an English translation accompany the foreign language filing:

1. An instrument written in another language executed prior to August 22, 1897; or
2. An English instrument with a foreign-language acknowledgement if acknowledged outside the United States and containing a certificate, stamp, or seal of a notary public or other official before whom the acknowledgment was taken.

Use of Assumed Names in Texas

How does the Texas Business Organizations Code ("TBOC") address the use of assumed names by companies in Texas?  That's a trick question - it doesn't, except by reference to the Texas Assumed Business or Professional Name Act (the "Assumed Name Act"), Chapter 71 of the Texas Business and Commerce Code.

Under the Assumed Name Act, a company that conducts business in Texas under other than its legal name (an assumed name) must file an assumed name certificate.

If the company using an assumed name is a filing entity, such as a corporation, limited partnership or limited liability company, the assumed name certificate must be filed with the Texas Secretary of State and the Texas county where the company's principal office is located (or if the company's principal office is outside of Texas, the Texas county in which the company's registered office is located).

If the company is not a filing entity, such as a sole proprietorship, the company must file the assumed name certificate in each Texas county in which the company maintains a business premises (or each county it conducts business if it does not maintain a business premises in any county).

The assumed name certificate must state:

1. the company's assumed name;
2. the company's legal name;
3. the company's jurisdiction of formation;
4. the period, not to exceed 10 years, that the assumed name will be used;
5. the company's entity type;
6. the address of the company's principal office or registered office, as applicable; and 
7. the counties in which the assumed name will be used.

An assumed name certificate must be renewed every 10 years if the name is still in use. The renewal certificate must be filed within six months prior to the assumed name certificate's expiration date.

Filing an assumed name certificate does not give the company the right to use the assumed name in violation of another company's the common or statutory copyright law or similar law.      

A company that violates the Assumed Name Act may face civil or criminal penalties.

Lessons from Linsanity

Like many basketball fans worldwide, I've been captivated by the story of Jeremy Lin.  In case you've missed the seemingly endless coverage of the Jeremy Lin story (dubbed "Linsanity") on ESPN and elsewhere, Lin is the starting point guard for the NBA's New York Knicks.  Since getting his first NBA start earlier this month, Lin has been terrorizing the NBA.  Among the amazing bullet points about Lin are as follows:

• Lin is a 2010 graduate of Harvard University.  As a 1998 graduate of Harvard Law School myself, I can tell you that it is very rare for a Harvard man to excel in the NBA.  How rare?  The last Crimson player in the NBA was Ed Smith in 1954!   
• Lin is a Taiwanese-American and the first American-born NBA player ever to be of Chinese or Taiwanese descent.
• Lin was undrafted out of college, waived by two other NBA teams, and was in-and-out of the NBA's developmental league (D-league) before landing as a back-up for the Knicks this year.  At some points during his brief NBA career his prospects were so uncertain that he was sleeping on his brother' couch rather than signing a lease on his own apartment.
• The Knicks were 8-15 with their season circling the drain until injuries and poor play by other Knicks forced Lin into playing time and into the national spotlight.  Then, Linsanity struck and the Knicks won 7 straight games.
• During Lin's first 5 games as a starter, he scored 136 points (27.2 points per game), the most by any NBA player in his first 5 games as a starter since the 1976 NBA-ABA merger.

There is very little about Linsanity that is not amazing and unprecedented, so what can we learn from all this?  Well, here are a few timeless nuggets that are reinforced by the Linsanity story:

1) Dream Big.  We shouldn't let stereotypes or other people's preconceived notions limit the dreams or goals we set for ourselves.  Jeremy Lin had let the facts that he played basketball at Harvard, or that he was a Taiwanese-American, or that he was undrafted, cause him to give up on his dream of playing in the NBA.  He believed in himself and eventually the rest of the world started believing in him too.

2) Be Ready.  Although Jeremy Lin began his career in the D-league and began the season as a back-up player, he worked hard and was prepared.  So when the coach called his name, he was ready to perform.  There is an old saying that "Luck is where preparation meets opportunity."  Lin wasn't lucky - he was prepared when he got his opportunity.

3)  Be Bold.  Beyond being ready, Lin was bold and played his game when his number was called.  Given his humble background, he knew he might not have many chances to show what he could do in the NBA.  So when he got the chance, he didn't play safe - he played with confidence and aggressiveness.  And that has made all of the difference.

4) Have Fun.  Lin's joy for the game is obvious on the court, making his journey more fun for all of us to follow.  As Mae West famously said, "You only live once, but if you do it right, once is enough."