Fast-growing businesses often encounter unique and accelerated business-related issues, such as a shortage of capital and human resources, due to their rapid expansion. Proactively dealing with the legal ramifications of these and other issues is often painless and can help ensure that a company and its stakeholders are properly aligned. On the other hand, a company that only reacts to the legal ramifications of these issues ends up spending more resources resolving the problems, which could have been avoided.

A fast-growing company often needs capital and seeks equity investments, which raises numerous securities law issues. Equity raises must comply with both federal and state securities laws. Those laws differ depending on, among other things, the size of the offering and the residency of the investors. A company raising capital should address the securities laws issues ahead of and during the raise to protect itself. At the conclusion of any funding round, the company should thoroughly update its list of owners to accurately reflect the new ownership structure.

Originally Published in Missouri Business - December 11, 2014.