Business and Personal Finance Dictionary

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• REGULATION D FILINGS
  
  Rule 505 of Regulation D of the Securities Act of 1933, as amended, allows firms to raise up to $5 million in a twelve (12) month period. Securities can be sold to a maximum of thirty-five (35) non-accredited investors and an unlimited amount of accredited investors. Potential investors cannot be generally solicited and advertising is not permitted in most states. Stock sold through this private placement venue is restricted stock and generally may not be sold for several years. Rule 506 of the same act allows firms to raise an unlimited amount of money in a twelve month period. This offering may be sold to thirty-five (35) non-accredited (sophisticated) investors and an unlimited number of accredited investors. This program is designed for emerging growth companies who have access to potential major investors. This offering does not require registration with the SEC or state authorities, just notification. Regulations vary from state to state. Both the federal and state regulatory authorities require an offering memorandum that meets standard disclosure requirements.
  
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