Wilmington Startup Attorneys & Lawyers

Form S-3: What is it?

Form S-3 is a simplified securities and exchange form that registers securities for companies. In order to use Form S-3, certain criteria must be met. Form S-3 can be used by a company that qualifies, in order to register securities under the Securities Act of 1933, instead of using the original Form S-1.

Registrant Requirements

S-3 registration gives investors the right to demand that a company registers their shares using Form S-3. Form S-3 is a shorter registration form than Form S-1, which is used in an initial stock launch or IPO. Form S-3 can be used by a company one year after an IPO. 

In order to use Form S-3 for securities, your company must meet certain requirements:

• The compa

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What Is Unfair Competition?

Unfair competition occurs when another company uses wrong or deceptive business practices to gain a competitive advantage. The major category of unfair competition relates to intentional confusion of customers as to where the product came from, while the secondary category relates to unfair trade practices. Some of the most common forms of unfair competition include:

• Bait-and-switch selling technique, such as substituting a lower-cost product from a different brand for a more expensive, higher-quality product.  
• False advertising or making false claims about a product to promote it.
• Misappropriation or use of confidential information, such as stealing a competitor's special formulation or other trade secrets.
• Trade dress violation, or copying the physical appearance of a product and/or packaging in the attempt to fool a customer into buying it.

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Anti-Dilution provision is a clause that gives an investor the right to maintain the same percentage ownership of a company by purchasing a proportional amount of shares in the future when securities are issued.

Dilution: What Is It?

To understand what “anti-dilution” is, you must first understand the meaning of dilution.

The term, “dilution” refers to an event in which the shareholders’ ownership of a company is reduced due to the issuance of new shares in that particular company. The ownership percentage is decreased as the whole capital is increased, the concept is simple as that.

Dilution occurs when you issue new stock in a company. Consider an investor who owns 30 out of a company's 100 shares; technically, he owns 30 percent of the company.

Imagine the corporation

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Key Takeaways:

• Definition and Importance: Right of first offer (ROFO) allows a specified party to make the first bid when an asset is being sold or leased, reducing market listing times and brokerage fees for sellers while giving holders a prime opportunity to acquire.
• Real Estate and Business Use: ROFO is common in commercial real estate and business sales, particularly beneficial in tenant-landlord and business partnership scenarios.
• Legal Considerations: Clearly defined terms in a ROFO contract, including timeframes, pricing, and sale conditions, are crucial to avoid misunderstandings. Legal assistance is recommended to ensure the contract is equitable and enforceable.
• Advantages vs. Disadvantages: ROFO offers stability for tenants and fast sales for landlords but lacks the strength of the right of first refusal (ROFR), which deters third-party bids.
• Practical

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