Regulation D Rules Your state might require you
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Posted On: 06/14/2018 4:39:29 PM
Regulation D Rules
Your state might require you to prepare a private placement memorandum, which contains a set of disclosures about the company and the shares, before allowing you to exercise one of the registration exemption rules. Rule 504 allows you to privately sell up to $1 million in securities within a 12-month period, but all the purchasers must be “accredited” investors -- individuals and institutions that meet certain standards for wealth and sophistication. Rule 505 has a $5 million annual cap and permits sales to as many as 35 nonaccredited investors. Under Rule 506, you can raise an unlimited amount of capital.
Your state might require you to prepare a private placement memorandum, which contains a set of disclosures about the company and the shares, before allowing you to exercise one of the registration exemption rules. Rule 504 allows you to privately sell up to $1 million in securities within a 12-month period, but all the purchasers must be “accredited” investors -- individuals and institutions that meet certain standards for wealth and sophistication. Rule 505 has a $5 million annual cap and permits sales to as many as 35 nonaccredited investors. Under Rule 506, you can raise an unlimited amount of capital.
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