Thursday, November 10, 2011

Why The Micro Cap Company Should be Aware of The Uniform Commercial Code Article 2

In the over the counter market (OTC), it is essential to have a firm grasp on securities laws and financial business acumen to make the company sustainable and profitable.  In the world of contracts, sales or transactions of goods generally do not fall under either of the latter categories.  In this vein, the small company executive and micro cap sector participants shoud be aware of the The Uniform Commercial Code Article 2 (The Code).

Unless The Code otherwise requires, it applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does The Code impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

In the world of implied valued corporations, where market capitalization is determined by shares x number of shares, a contract written and executed according to the legal standard has a higher chance of bringing the parties what they contracted for.  In particular to OTC or micro cap companies, a contract written by proper adequate legal counsel in accordance to The Code will allow for more options for recourse in regards to obtaining the contract price.  This all inevitably leads to a more valuable corporation, given the contracts entered into are of value to the corporation.  The formal requirements of a contract are listed below as laid out in The Code.  To view the complete code click on the picture.

Hope this was helpful

The MicroCapCompany.com
Follow Nicholas Coriano on Twitter

........................................................

About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The MicroCapCompany.com a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on PushYourRank.com

About MicroCapCompany.COM: MicroCapCompany.COM (The Blog) is a blog focused on providing articles, news and information on the micro cap sector and start-ups.  The Blog is a free service offered by Cervitude™ Investor Relations (a micro cap investor relations firm) and offers compensated research reports and business plan writing services for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email CervitudeNetwork@gmail.com, If you would like to advertise on The Blog, click here


__________________________________________________________________________________
§ 2-201. Formal Requirements; Statute of Frauds.

(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.

(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable

     (a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or
     (b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or
     (c) with respect to goods for which payment has been made and accepted or which have been received and accepted (Sec. 2-606).

No comments:

Post a Comment