Regulation D rule 504, 505, 506 Private Placement Memorandum PPM’s are exemptions from registering with the SEC.

The SEC Securities and Exchange Commission has a broad view of what a security is. Basically anytime you raise capital you must file a registration statement with the SEC which is time consuming and expensive.

There are exemptions such as regulation D.

Reg D or Regulation D has Rule 504 , Rule 505, and Rule 506 of Reg D.

Having professionally prepared paperwork is a must in business financing when you are raising capital from investors even if it is only $50,000.

Private Placement Memorandum: What is a Private Placement? The definition is it is the documentation that discloses all information to the investors about your business & it operations and structure risks involved. To accept money from investors you are required to stricty follow the rules and of the Securities and Exchange Commission and State securities regulators. There are specific rules about raising capital from investors even if only few investors. The Regulation D Offering an exemption and must be done properly. If you don’t do things correctly their could be legal ramification or at the least have to return the investors money.

Regulation D or Reg was created with the Securities Act of 1933. Reg D is an exemption to sell securities privately without having to do a registration statement with the SEC.

Regulation D Offerings is how corporate finance and business finance is structured before you go public. Once a company goes public there is easy ways to raise capital and you can even go to the general public.

This just allow you to raise money from people you know. If you want to go to the general public you must go public and do a registration statement and do other filings with the federal and state governments which we can assist you with.

We can take your company public and help you be a publicly traded company. Please contact us for further information.

Rule 504 allows a company to raise up to $1 million during a 1 year period from any investors. They cannot advertise and they can raise money from those they have a pre-existing relationship with.

Rule 506 of Reg D is what is called a safe harbor for the private placement offering. The 506 Regulation D is an exemption of the 1933 Act. Businesses raising capital under the Rule 506 exemption require you to satisfy certain exemptions such as no more than 35 investors that are not accredited.

Disclaimer: None of this is to be construed as legal or financial advice. Please check with your own legal and financial advisor’s to verify this information.