Thanks to my colleague Howard Unterberger for this week's legal portion.
You're a doctor forming a medical practice which you'll manage and which you'll own jointly with several of your colleagues. You and several friends are forming a partnership to purchase a rental property. You've obtained a loan for your business which you've agreed to repay, in part, with a percentage of your profits.
What do these and countless other similar situations have in common? In each case, you are issuing a security. Many people believe that the securities laws just cover stock issued by corporations, and they're quite surprised to learn that many seemingly routine business transactions are covered as well. A security, under both state and federal securities law, can include any investment made with the expectation of making a profit from the efforts of other people.