A Private Placement Memorandum (PPM) is one of the legal documents a Company needs to sell securities (common stock, preferred stock or convertible debt) to individuals in a private offering. The PPM consists of your business plan plus considerably more disclosure information such as specific risk factors, disclaimers and the details of the securities being sold. As most States have their own securities laws, you must have your PPM reviewed by an experienced securities attorney to make sure you are complying with the latest securities laws in your State as well as Federal Securities laws.
A PPM may not be necessary if you are selling stock in your company to members of the management team, close friends or family, but if your potential investors are unknown to you or if you are anticipating showing the PPM to a large group of potential investors, you most likely will need a PPM. Financial Scribe can prepare a PPM for you, suggest a securities attorney in your State and even consult with your attorney if you wish.