Follow-up and Closing an Offering
Once you have made a sale of securities to an investor, there are essential record keeping requirements. The following are some guidelines for keeping accurate records of your securities offering.
□ When a sale of securities appears imminent, check the notice filing requirements of the state in order to have timely filings.
□ Open a separate file on each investor. In that file, place the completed subscription documents, copies of the check you received from the investor, and any correspondence with the investor.
□ Check the subscription documents for completeness and make certain they contain all of the information requested. Also, be certain they have been signed in all appropriate places. In particular, make sure the investor has noted whether they are an accredited investor.
□ When you have accepted the subscription, sign it in the appropriate place, keep the original document, and send a photocopy and the investor's stock certificate (or LLC membership unit certificate) to the investor. You should also send a welcome letter.
□ Keep a master list of investors, including the names, addresses, Social Security numbers, dates and amounts of purchases, number of shares or units purchased, and whether the investor is accredited or nonaccredited.
□ End the offering of securities on a specific documented date and close it out.
□ Send periodic reports to the investors including financial reports.
Your shareholder database can be an important source of referrals for accredited investors. If you keep investors informed about the progress of the company and they are satisfied with their investment, you can return to them for further offerings.
