EDUCATIONAL LIBRARY

SECURITIES LAW KEYWORDS

Section 4(a)(2) Private Offering


A small business issuer utilizing this federal exemption will still have to abide by applicable state laws. In addition, the issuer will have to take care to seek only sophisticated investors (as defined by federal law) who have sufficient access to pertinent company information. Moreover, general solicitation and public advertisement is not allowed.




Regulation D - Rule 504


Multi-state Direct Public Offering (DPO) used by small businesses for offerings up to $5,000,000 in any 12-month period to both accredited and non-accredited investors. The issuer must also adhere to state laws. General solicitation and public advertisement are allowed under certain circumstances.




Regulation D - Rule 506(b)


Multi-state DPO where small businesses can issue offerings up to no maximum, except general solicitation and public advertisement are not allowed if non-accredited investors are involved. There is no requirement to adhere to state laws.




Regulation D - Rule 506(c)


Multi-state DPO where small businesses can issue offerings up to no maximum and general solicitation and public advertising are allowed, but only to accredited investors. There is no requirement to adhere to state laws.




Federal Regulation Crowdfunding


Small businesses can issue offerings up to $1,070,000 [soon to be $5,000,000] in any 12-month period to both accredited and non-accredited investors so long as the offering is through a federal registered platform. There is no requirement to adhere to state laws.




State Regulation Crowdfunding


Many states have passed their own crowdfunding laws for intrastate offerings. Some states, like Wisconsin, have limits up to $2 million in any 12-month period.




Regulation A


Tier 1: small businesses can issue offerings up to $20 mill [soon to be $35 mill] in any 12-month period to both accredited and non-accredited investors nationwide, but must also adhere to state laws. Tier 2: small businesses can issue offerings up to $50 mill [soon to be $75 mill] in any 12-month period to both accredited and non-accredited investors nationwide and do not have to adhere to state laws. Tier 2 requires more extensive disclosure requirements than tier 1, including audited financial statements.





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