To register the offering a filing must be made and will be subject to a thorough review by the Securities Division. The Division will review the offering for compliance with merit and disclosure requirements and send your business a comment letter outlining the areas that must be improved in order to obtain a permit to sell securities in a public offering.
There are three different registration provisions for securities offerings. The registration provision that will fit your offering depends on whether the offering will be registered at the federal level with the SEC and how much guidance you will need to prepare the offering documents.
First, you must determine whether the offering will be registered federally with the SEC or will be made in reliance on a federal exemption from registration. One exemption from federal registration is available where the offering is made in only one state (Rule 147). Another federal exemption is available for offerings of $1 million or less (federal Rule 504). Another exemption is available to offerings of $5 million or less (Regulation A). To determine whether your offering will be registered at the federal level or an exemption will be utilized, please consult the SEC’s Guide for Small Business.
Will the offering be registered with the SEC or made in reliance on Regulation A, or will your business instead rely on a federal exemption from registration other than Regulation A? If you are still unsure whether the offering would be registered with the SEC after reviewing the SEC’s Guide for Small Business, you should consult a private attorney with experience in the securities laws to help you make this determination.
The offering will be made in reliance on a federal exemption from registration with the SEC.