Many entrepreneurs don’t realize that every offer and sale of a security is required to either be (a) registered with the Securities and Exchange Commission (SEC) or (b) subject to an exemption from registration.  That requirement applies to the sale of securities to multiple high net worth individuals, the sale of a security to one person in a private transaction, the sale of a security to a family member and all offers and sales of securities of public and private companies, including organizations with only two or three persons.  Notwithstanding these requirements, a significant number of offers and sales may be exempt from registration under the Securities Act. Offerings that are exempt from provisions of the federal securities laws may still be subject to the notice and registration requirements of various state laws. You should make sure to check with the appropriate state securities regulators before proceeding with your company’s offering. 

Here are the exemptions from registration that are most frequently used.

     
 Reg. D, Rule 504  Reg. D, Rule 506(b)  Reg. D, Rule 506(c)
Regulation Crowdfunding Regulation A Intrastate Offerings

 

 

 

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