What is a Letter of Comfort? A letter of comfort is a financial document, indicating a willingness to support a subsidiary company to meet its financial obligation. The letter of comfort is usually written by an accounting firm or a parent company to a lender. It gives assurance that the parent company is willing to support the subsidiary company. I...

What is a Private Investment Company? Private investment companies are not covered under the section 3C1 of the 1940 Investment Company Act. They are not required to register with Securities Exchange Commission (SEC) but their investors and investments in stocks or bonds are limited.  A private Investment company is made up of a minimum of 100 inves...

How Entrepreneurs encounter and take advantage of Opportunities? Understanding or identifying entrepreneurial opportunities is the focus of entrepreneurs, investors, and academics. By its very nature, entrepreneurship involves the commencement of something new. The recognition of an idea as having the potential create a desired value and the decisio...

What are the limitations on an issuer during the Post-Filing Waiting Period? During the post-registration, waiting period, special rules apply to the general dissemination of information about the issuance. Generally, oral discussions or offers to buy the securities are unregulated. This allows investment banks to carry on a road show, which is a co...

What is a Debenture? A debenture is a form of debt instrument used by companies for borrowing money. In the US a debenture is not backed by any physical asset or collateral; rather, it is secured on the borrowers reputation and credit history. In the UK, in contrast, a debenture is based on the asset of the borrower. How Does a Debenture Work? So pr...

What role do states play in consumer protection? States pass and enforce any number of consumer protection laws. These laws sometimes offer protections in addition to those offered by federal law. State laws protecting consumers are generally known as Unfair and Deceptive Practices (UDAP) statutes. Common areas regulated by UDAP statutes include: ex...

What is Nominal Value? Nominal value is simply defined as the face value or par value of a security. When a security such as a bond or stock is sold to a buyer, the amount that reflects on the evidence of purchase or security certificate is the nominal value. The nominal value of a security also refers to the redemption price of the security, that i...

What is the Jones Act? The Jones Act, otherwise called the Merchant Marine Act of 1920, regulates maritime commerce across the United States. According to this federal law, citizens and permanent residents of the US are the only ones that can engage in merchant marine activities in the U.S., such as entering US trading lanes.  When does the Jones Ac...

What is the European Central Bank? The European Central Bank (ECB) is the bank of European Union (EU) which sets and oversees monetary policy of the states which have adopted euro as national currency. The European Central Bank (ECB) has 19 members and all states are geographically located in Eurozone. The main purpose of European Central Bank (ECB)...

What Can I Patent? Patent rights are some of the most important assets for any company. These rights allow the holder of those rights to prevent others from copying or reproducing the patented elements for a commercial purpose. Interestingly, holding patent rights does not necessary entitle the holder of those rights to produce the claimed elements ...