Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or Reg D) provides three exemptions from the registration requirements, allowing some smaller companies to offer and sell their securities without having to register the securities with the SEC.
Rule 504 or Regulation D provides an exemption from the registration of the federal securities laws for some companies when they offer and sell up to $1,000,000.00 of their securities in any 12 month period.
A company can use this exemption so long as it is not a Blank Check company and does not have to file reports under the Securities Exchange Act of 1934. Also, the exemption generally does not allow companies to solicit or advertise their securities to the public, and purchasers receive restricted securities, meaning that they may not sell the securities without registration or an applicable exemption.
Rule 504 does allow companies to make a public offering of freely tradable securities but only if one of the following circumstances is met:
(1) The company registers the offering exclusively in one or more states that require a publicly filed registration statement and delivery of a substantive disclosure document to investors;
(2) A company registers and sells the offering in a state that requires registration and disclosure delivery and also sells in a state without those requirements, so long as the company delivers the disclosure documents required by the state where the company registered the offering to all purchasers (including those in the state that has no such requirements); or
(3) The company sells exclusively according to state law exemptions that permit general solicitation and advertising, so long as the company sells only to "accredited investors.
An accredited investor is defined by federal securities law as:
. a bank, insurance company, registered investment company, business development company, or small business investment company;
. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
. a charitable organization, corporation, or partnership with assets exceeding $5 million;
. a director, executive officer, or general partner of the company selling the securities;
. a business in which all the equity owners are accredited investors;
. a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase;
. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
. Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
. even if a company makes a private sale where there are no specific disclosure delivery requirements, a company should take care to provide sufficient information to investors to avoid violating the anti fraud provisions of the securities laws. This means that any information a company provides to investors must be free from false or misleading statements. Similarly, a company should not exclude any information if the omission makes what is provided to investors false or misleading.
Any information provided to an investor whether written or oral must be accurate in order not to violate the anti fraud provision,All securities offerings are subject to this provision.
This process provide a far less expensive way to take your company public than the traditional IPO, and it also provide a much faster track to having your company's shares listed and trading.
The Regulation D (504) offering is one method of going public we recommend to our clients, we normally conduct a review of the company to see if going public is a viable option for them.
Joseph D. Quinones, President of Genesis Corporate Advisors has spent over 25 years in the securities industry. In 1992 he founded JDQ Financial Group, Inc. and proceeded to build it up from a one man operation to the point where it employed many traders, advised numerous client and generate millions in revenues.
For other option please visit our website: www.genesiscorporateadvisors.com
Email: josephquinones@genesiscorporateadvisors.com
executive chauffeured services Bradford .. Madison to Airport carPart of the power plan is making sure you have... Read More
The reason we Franchisors call it an exclusive territory is... Read More
Once you've decided to incorporate your small business the next... Read More
Many new ventures are preoccupied with all the money they... Read More
Setting priorities in your business? Your first job is to... Read More
Small businesses need Public Relations, possibly more than large corporations,... Read More
Managing cash flow is every small business owner's most important... Read More
If a customer owes your local business money, it's hard... Read More
I ran a franchise company for many years, a car... Read More
Whether it has been thrust upon you by external market... Read More
In the Truck Washing Business every single type of vehicle... Read More
The Operations Plan is a critical component of any business... Read More
In the book Women and Small Business author gives all... Read More
I meet and talk to hundreds and hundreds of business... Read More
Incredible as it sounds, you have a goldmine of free... Read More
Aircraft Interiors of personal and corporate jets have hundreds of... Read More
It's just like a marriageTo expect a bank manager or... Read More
Back when I owned an inventory-based business, one of my... Read More
Congratulations, you are starting a small business! You are taking... Read More
Would you rather have one good client paying you five... Read More
So you think you're not justified in taking time away... Read More
It's a commonly quoted statistic: 80% of all small businesses... Read More
1. Don't Spend Too Much Time PlanningWhen you are entering... Read More
Do you have a Business Plan? Congratulations, but you are... Read More
There are both fixed and mobile detailers. Consumers often will... Read More
O'Hare Chicago prom limo ..A reader of one of my online sessions asked should... Read More
I meet and talk to hundreds and hundreds of business... Read More
Before you start a business we encourage you to prepare... Read More
Just a few years ago, when one thought of a... Read More
Why should you describe your business to others in 5... Read More
Paper Shredding Business Opportunities are blossoming up everywhere because in... Read More
Before you want to build your business, you need to... Read More
Rule 15C211Under SEC Rule 15C211, a U.S. securities broker or... Read More
If an organization lacks a mission statement, it is worthwhile... Read More
You bet a name is important. Many small business owners... Read More
With the massive explosion of start-ups and home businesses developing,... Read More
Here are some sound debt collection techniques that can be... Read More
You bet it's worth it. Publicity via news releases, along... Read More
Many smaller businesses choose niche markets for various reasons and... Read More
My colleague, Jane, recently lamented to me an all too... Read More
One of the primary concerns all small businesses have is... Read More
We very much like what we see in Lubbock, TX... Read More
Cleaning concrete is tough and there is an easy way... Read More
You can't imagine how many people ask me how I... Read More
Becoming a contractor or sub-contractor for the U.S. government can... Read More
With all the cabinet refacing business opportunities out there, you... Read More
When is advice free and when should you charge for... Read More
Sometimes the simple businesses are the ones, which make good... Read More
Why should you always maintain a good report with a... Read More
If you run a pressure washing company in a rural... Read More
Small Business |