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Hiring Investor Relations Firms In Rule 506 Offerings Brenda Hamilton
Submitted 2014-01-05 18:25:04 Private placement offerings under Rule 506 of Regulation D of the Securities Act of 1933 Cheap AS Roma Jerseys , as amended (the “Securities Act”) are a cost effective and relatively quick way for private companies to raise capital prior to their going public transactions.

According to the Securities and Exchange Commission (the “SEC”) Rule 506 is the relied upon by issuers more than any other exemption from registration.

Rule 506(c) fundamentally changes the way unregistered offerings may be conducted. While the rule imposes stringent requirements, these requirements are manageable for issuers putting effective compliance strategies into place.

Effective on September 23, 2013, issuers will be able to use general solicitation and advertising in Rule 506 (c) offerings made to accredited investors, making it easier for issuers to raise capital and obtain the necessary shareholder base for their going public transaction. This blog post addresses the common questions we receive about private placement offerings made in reliance upon Rule 506(c) under the JOBS Act.

Q. What is a Rule 506 offering?

A. Rule 506 of Regulation D provides issuers with a safe harbor from the registration requirements for certain private placement offerings.

Q. What are the maximum amounts that can be raised in a securities offering conducted in reliance upon Rule 506′s safe harbor?

A. Rule 506 does not limit the amount that can be raised.

Q. Can all companies rely on the securities exemption provided by Rule 506 of Regulation D?

A. Yes, Rule 506 is available to both private and public companies regardless of whether they are reporting with the SEC. It is also available to both domestic and foreign issuers.

Q. Is there a limit on the number of purchasers who can invest in a Rule 506 Offering?

A. No. After September 23, Rule 506(b) will allow issuers to sell securities to up to 35 non-accredited investors and an unlimited number of accredited investors. Rule 506(c) will allow issuers to sell securities to an unlimited number of accredited investors.

Q. How did the JOBS Act change Rule 506 offerings?

A. The JOBS Act eliminated the prior prohibition against general solicitation and advertising in Rule 506 securities offerings, provided that the securities offered are sold only to accredited investors; however, the issuer is required to take “reasonable steps” to verify that all investors are accredited. After September 23 Wholesale Umar Sadiq Jersey , 2013, Rule 506 offerings being made without general solicitation will be conducted pursuant to Rule 506(b).