offering circular

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Offering Circular

An abbreviated prospectus detailing the structure and goals of an investment company such as a mutual fund. The SEC requires that investment companies file prospecti before issuing shares. These often contain a great deal of information that many investors do not need in order to make an investment decision. Generally speaking, offering circulars contain relevant information, such as the terms of purchase, the amount of the load (if any), the fund's investment strategy, and perhaps historical financial statements. See also: Greensheet.

offering circular

An abbreviated prospectus that describes a new securities issue.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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* General public solicitation of investors without requiring an offering circular;

Small business initiatives under the securities acts

Franchise laws prohibit distribution of most forms of information to prospective franchisees unless it is an offering circular complying with strict Federal and state requirements.

Usually, the disclosure is provided by a "Uniform Franchise Offering Circular." Another document, called the "FTC Format," is allowed in many states, but is used less often.

The accountant's role in assisting franchisors

While some franchisors merely post their offering circular on their Web site, this is not common.

Electronic UFOC disclosure: can you and should you? More franchisors are answering these questions with an emphatic "yes"

When a lawyer completes an offering circular for a new client, he should provide the client with a summary of the laws that regulate the sale of a franchise.

The letter should remind the franchisor of the federal rule requiring a copy of the offering circular be given to a prospective franchisee at the first face-to-face meeting at which the sale of the franchise is discussed, and at least 10 business days before any money is paid by the franchisee, or the franchisee signs any contract.

Before you start selling franchises--a legal checklist for new franchisors: now that you have your offering circular, you are no doubt ready to sell franchises. Did your lawyer give you a compliance letter you can refer to when selling franchises? If not, are you familiar with the myriad laws that will govern your activities in the next several years? (Legal/Legislative)

To this end, an "offering circular." or OC (also known as an offering memorandum), is prepared as the principal disclosure document associated with the transaction, containing detailed disclosure on the issuer's business, results and financial condition.

As noted above, an offering circular, though not a public prospectus, must satisfy the relevant anti-fraud requirements of the securities laws.

The winding road to reward: Rule 144A securities offerings can be a good source of capital for mutual insurance companies, but getting there requires effort

As to earnings claims, the proposed amendments would require franchisors making earnings claims of gross revenue or sales in Item 19 of the Uniform Franchise Offering Circular (UFOC) to include a statement of whether or not the earnings claim figures reflect the cost of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figure to obtain net income or profit.

State regulatory developments in franchising: in 2002 and the first part of 2003, states maintained their active level of enforcement and regulation of franchising. General trends include more uniformity among the states, more emphasis on relationship and dispute resolution issues, and streamlining of requirements regarding registration of franchise offerings. (Mediation. Arbitration. Litigation)