Certain Transactions When money or property has passed between the company and one of its insiders, it may require explanation in the prospectus. The name "certain transactions" comes from the instructions accompanying the SEC forms for registering a public offering. For example, when an entrepreneur hopes to take a company public, it is wise to avoid any of the situations that would need description in the certain transactions section. They may make it difficult to qualify the offering under the blue sky laws of a merit state. Descriptions of certain transactions tend to be lengthy and complicated, causing prospects to reject the offering based on their "smell test."
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