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Simple English definitions for legal terms
securities-offering distribution
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A quick definition of securities-offering distribution:
A securities-offering distribution is when a company sells stocks or other securities to the public. This can happen in two ways: through a formal agreement with a broker-dealer or informally without a broker. It's like when you sell lemonade to your neighbors, but instead of lemonade, it's parts of a company that people can buy.
A more thorough explanation:
Definition: Securities-offering distribution refers to the process of an issuer publicly offering securities through an underwriting agreement with a broker-dealer or on an informal basis, with or without brokers.
Examples:
- Controlled-securities-offering distribution: An issuer enters into a formal underwriting agreement with a broker-dealer to sell a certain number of shares of its stock to the public.
- Uncontrolled-securities-offering distribution: An issuer offers securities to the public without a formal underwriting agreement, such as through a crowdfunding campaign.
These examples illustrate how an issuer can distribute securities to the public through different methods, either with the help of a broker-dealer or on their own. This process allows the issuer to raise capital by selling ownership stakes in the company to investors.