Regulatory Framework Rubric: 506c – 506b – Reg CF

By Published On: May 6, 2022Categories: Uncategorized0 Comments
Rule 506(b) 506(c) Reg CF
Permitted Investors Accredited investors and up to 35 non-accredited investors. As long as the non-accredited investors are “sophisticated.” Accredited investors only. Anyone
Verification of Accredited Investors Verification of Issuer may rely on a statement by the investor to reach a reasonable belief that he, she, is accredited. The issuer must verify that investors are accredited, typically using a third party like Verifyinvestor. An issuer may rely on a statement by the investor to reach a reasonable belief that he, she is accredited.
Dollar Limits ·   No limit on the amount raised·   No limit on how much each investor can invest ·   No limit on the amount raised·   No limit on how much each investor can invest ·   (i) The limit is $5M per year, and (ii) this limit applies to all issuers under common control·   Investment amount limits for non-accredited investors based on income and/or net worth·   No investment amount limits for accredited investors
Total Number of Shareholders In general, any company with more than 500 non-investors or more than 2,000 total investors must become a full“reporting company” under the Exchange Act. In general, any company with more than 500 non-investors or more than 2,000 total investors must become a full“reporting company” under the Exchange Act. Unlimited if certain conditions satisfied
Information Required ·   If the offering includes only accredited investors, no information is required by law, although we include information anyway to inform investors and avoid Rule 10b-5 liability.·   If the offering includes even one non-accredited investor, the law requires that the issuer provide lots of information, No information is required by law, although we includeinformation anyway to inform investors and avoid Rule 10b-5 liability. The information must be submitted in the Form C.
SEC Registration No No No
State Registration No No No
Pre-Sale Filings None None Form C
Post-Sale Filings Form D to the SEC.Corresponding forms to each State where an investor lives. Form D to the SEC.Corresponding forms to each State where an investor lives. Same information as in initial filing to be filed yearly
Advertising No advertising of actual deals permitted. Sales may be made only to investors with whom the issuer has a pre-existing relationship. Advertising of any kind is allowed. Internet, TV, radio, leaflets dropped from planes, anything. Unlimited advertising is allowed on the portal; advertising elsewhere is subject to restrictions.
Sold Through Portals Permitted, but not required Permitted, but not required Required

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