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
limo Chicago Addison ..I recently met with a very successful magazine publisher who... Read More
As a business owner, you already know how important it... Read More
In today's economic climate, the first priority for the small... Read More
When you feel like you're always busy working on your... Read More
Have Some Time to Yourself One of the most important... Read More
The story is told of a tiger chasing some goats... Read More
The Dynamics of Daylight Savings Time changes the way we... Read More
What is the satisfaction & expectation review of the business... Read More
What is a Virtual Assistant?? A Virtual Assistant is that... Read More
Whether your target audience is in your neighborhood or across... Read More
Macon, GA goes after garage-gas station conversion detail/hand car washes... Read More
As a practise gets larger & larger the associated problems... Read More
If you intend to franchise your company you will need... Read More
If you are looking for a franchise opportunity, the choice... Read More
You are probably hard at work promoting your business (and... Read More
Your on-line success is based on your efforts and yours... Read More
There are countless ways to save your business money. Unfortunately,... Read More
You may be in Mail Order, Direct Mail, or you... Read More
The revenue history is a vital piece of your power... Read More
Did you know that satisfaction is the number one emotion... Read More
As a Boat Detailing Specialist, you may want to offer... Read More
Business consulting opportunities might be just what your are looking... Read More
When you hear the word "success" does it bring on... Read More
Contrary to popular belief, small businesses can survive a crazy... Read More
If you're anything like me then you dislike with a... Read More
Benton transportation to O'Hare ..Do you need grant funding for your nonprofit organization? If... Read More
A tongue-in-cheek look at the skills required to operate a... Read More
A corporate shell could be liken to a house that... Read More
Are you tired yet of all the books out there... Read More
If you intend to franchise your company you will need... Read More
In many industries, image is one of the last things... Read More
You may find this Newsletter a little long winded but... Read More
Many pressure washing companies will be glad to take on... Read More
Here is an interesting case study of a company, which... Read More
Q: After years of dreaming about starting my own business,... Read More
Franchisor expansion policies are not as simple as one might... Read More
The life cycle of the typical small business is short... Read More
A Mattress Cleaning Business might be just for you if... Read More
Too often in business we get trapped into reviewing our... Read More
Introduction: This article is written as a general discussion on... Read More
The start of a new year is a time for... Read More
When is advice free and when should you charge for... Read More
Auto detailers are often asked to clean boats and detail... Read More
You're pretty proud of yourself! After all, only four months... Read More
More sales and more profit. Isn't that what you want... Read More
We were more than excited. Our women's doubles tennis team... Read More
Writing a business plan for a mobile car wash is... Read More
Many self employed professionals find themselves overwhelmed, frustrated, and confused... Read More
Sacred cows take a long time to die. We get... Read More
I was floored! I couldn't believe what they were saying!... Read More
Small Business |