RULE 506(b)
KEY FEATURES OF RULE 506(b)
- Companies can raise up to a maximum $10 million during any 12-month period;
- In most cases, securities sold under Rule 504 are restricted securities;
- Both accredited and non-accredited investors can participate;
- Some companies are not eligible to use Rule 504;
- Generally speaking, the issuer cannot use general advertising or solicitation when making the offering;
- The issuer must file a Form D within 15 days after the first sale of securities in the offering;
- Rule 504 offerings are subject to “bad actor” disqualification provisions; and,
- Issuers must comply with state security laws (“Blue Sky Laws”) and regulations in the states within which securities are offered and sold.
