Regulation D Rules Your state might require you
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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.