Private Placement Forms: Private Placement Memorandum (23 Pages), Investor Suitability Questionnaire (6 Pages) and Subscription Agreement (11 Pages)

Please Note: each of the forms in this package may be purchased individually and are listed elsewhere as such.
Private Placement Memorandum
This Form is a Private Placement Memorandum which is designed to be given to potential investors as they consider the merits of an investment. Since the investment is an investment in stock, and since it is being offered privately, there will not be any registration of the investment with the SEC. This means that all of the risks inherent in the investment must be presented to the potential investor in this document. The investor must represent that he/she has sufficient sophistication to understand this Memorandum and sufficient net worth to withstand the complete loss of the investment. It is important to complete the disclosure sections and business plan of this document with full financial information and any other information that may be relevant. One can never be criticized for providing too much information here – but can be severely punished for providing too little.
Note the references in the tax consequences section of the materials that it is intended that the corporation described herein will be taxed as an S corporation. This is not a requirement of any corporation, and this Form can be modified to address the tax consequences of the creation of a C corporation or an LLC or a partnership.
Investor Suitability Questionnaire
This Form is an Investor Suitability Questionnaire which is part of the package of documents involved with a Private Placement Memorandum and a Subscription Agreement. In order to be comfortable that an exception from the security laws registration requirements is applicable, the persons to whom a proposed investment is disclosed must be “accredited investors”, i.e. persons of sufficient net worth and sophistication to allow an exception to the protection offered to the general public under the securities laws (provided by registration) to be available. This Form asks the required questions to determine the suitability of an investor prior to sharing the Private Placement Memorandum with that investor. If the investor decides to proceed with an investment, then the Subscription Agreement is completed.
Subscription Agreement
This Form is a Subscription Agreement to be used in connection with a private placement of a stock offering. In order to meet the SEC requirements for an offering of stock to not be registered with the SEC, certain specific requirements must be satisfied, as recited in this Agreement; in particular, the sophistication and net worth of the investor. Here, the investor is purchasing shares in a corporation which shares will be subject to various restrictions on transfer unless they are subsequently registered with the SEC.
The Subscription Agreement is typically presented along with a Private Placement Memorandum which describes the stock offering in detail, outlines the risks of the investment, etc. There is often a Stockholders Agreement provided as part of a “package” of documents to be reviewed by the investor.
Author:
Steven G. Siegel is president of The Siegel Group, a Morristown, New Jersey - based national consulting firm specializing in tax consulting, estate planning and advising family business owners and entrepreneurs. Mr. Siegel holds a BS from Georgetown University, a JD from Harvard Law School and an LLM in Taxation from New York University.
He is the author of several books, including: Planning for An Aging Population; Business Entities: Start to Finish; Taxation of Divorce and Separation; Income Taxation of Estates and Trusts, Preparing the Audit-Proof Federal Estate Tax Return, Putting It Together: Planning Estates for $5 million and Less, Family Business Succession Planning, Business Acquisitions: Representing Buyers and Sellers in the Sale of a Business; Dynasty Trusts; Planning with Intentionally-Defective Grantor Trusts; The Federal Gift Tax: A Comprehensive Analysis; Charitable Remainder Trusts, Grantor Trust Planning: QPRTs, GRATs and SCINs, The Estate Planning Course, The Retirement Planning Course, Retirement Distributions: Estate and Tax Planning Strategies; The Estate Administration Course, Tax Strategies for Closely-Held Businesses, and Tort Litigation Settlements: Tax and Financial Issues.
Mr. Siegel has lectured extensively throughout the United States on tax, business and estate planning topics on behalf of numerous organizations, including National Law Foundation, AICPA, CCH, National Tax Institute, National Society of Accountants, and many others.  He has served as an adjunct professor of law at Seton Hall and Rutgers University law schools.
The Siegel Group provides consulting services to accountants, attorneys, financial planners and life insurance professionals to assist them with the tax, estate and business planning and compliance issues confronting their clients. Based in Morristown, New Jersey, the Group has provided services throughout the United States. The Siegel Group does not sell any products. It is an entirely fee-based organization.
Contact the Siegel Group through its president, Steven G. Siegel, e-mail: [email protected].