What are the legal requirements for issuing corporate bonds?
In Florida, corporations that wish to issue corporate bonds must comply with state law. These bonds are generally issued to raise funds for the corporation or to finance a specific project. In order to issue corporate bonds, the corporation must first file a registration statement with the Florida Department of Financial Services, Division of Securities. This statement must include a description of the bond offering, the terms of the offering, the company’s financial condition, and the risks associated with the bonds. The corporation must also provide an offering memorandum to potential bond buyers, which includes relevant financial data, a description of the relationship between the issuer and the investors, and any other pertinent information. This document is subject to review by the Florida Department of Financial Services, Division of Securities prior to issuance. In addition, the corporation must adhere to certain disclosure requirements. This includes providing information to potential bond buyers about the issuer’s financial condition, the risks associated with purchasing the bonds, and the amount of money the corporation intends to raise through the bond issue. The corporation must also provide buyers with a right of rescission, or the right to return the bonds for a full refund within three days of purchase. Finally, the corporation must certify that the securities have not been sold in violation of any law. The corporation must also provide a legal opinion and an opinion as to the solvency of the corporation from an independent attorney or certified public accountant. This will ensure that the bond issuance is in accordance with the law.
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