MISSISSIPPI CROWDFUNDING RULES (INTERNET BASED INVESTING)

Yesterday we had the opportunity to attend the Invest Mississippi Crowdfunding Seminar put on by the Mississippi Secretary of State which went over the new crowdfunding rules set to become effective May 26, 2015. This is important to Mississippian entrepreneurs for a number of reasons. First, the crowd funding rules create new opportunities to cost effectively access equity funding through the internet. Second, while there are still a number of requirements and limitations, this new process is less restrictive and should be a less expensive alternative to federal registration pursuant to Rule 504 of the SEC regulation D, 17 CFR Section 230.504. Third, these new rules are expected to create new investment opportunities for Mississippians looking to invest their money locally. Although the new rules are specifically intended to simplify the procedure for raising smaller amounts, what is small to some is still a lot of money to others. Under the new rules, during any 12-month period a Mississippi business may raise up to $1 million from both residents and non-residents of Mississippi, or up to $2 million by soliciting investments from Mississippi residents only. While new procedure is relatively straightforward, there are a many things that may impact the effectiveness of crowdfunding in your specific situation. For example, there is a requirement that at least 50% of the offering amount must be raised by the deadline stated in the Offering form or the money raised is refunded. Another is the requirement that at least 80% of the funds raised must be used in the State of Mississippi. And perhaps the most significant requirement or limitation deals with advertising...

CITY OF RICHLAND LOSES ZONING DISPUTE

In an important property rights and zoning case handled by our firm, the Mississippi Supreme Court yesterday unanimously affirmed the Mississippi Court of Appeal’s reversal of a zoning resolution passed by the City of Richland. In this case we represented Cleveland Mobile Home Community. The appeal was the result of an unconstitutional ordinance passed by the City of Richland in an effort to shut down the mobile home community. In April 2008, the City of Richland passed a resolution stating that anytime a mobile home was moved out of the park, the space could not be re-used or re-rented. So the effect of the ordinance was to gradually reduce the revenue so that Cleveland MHC would be forced out of business. On behalf of Cleveland MHC, we appealed the City’s actions through a Bill of Exceptions to the Rankin County Circuit Court. In response, the Mayor and Board of Aldermen argued that their resolution was proper under the City’s zoning ordinance, and that it was a valid exercise of the City’s police powers. The Circuit Court upheld City’s actions. We then appealed the case to the Mississippi Court of Appeals who ruled 9-1 that the attempt to destroy the Mobile Home Community by attrition was “arbitrary, capricious, and illegal.” The City of Richland then requested the case be reviewed by the Mississippi Supreme Court because the case presented a matter of first impression in Mississippi. The Mississippi Supreme Court granted the requested review. However, in the opinion handed down yesterday, the Mississippi Supreme Court unanimously affirmed the Court of Appeals finding that Richland’s actions appeared to be without reason...