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Under Regulation D Rule 504, a company is exempt from the registration requirements of the federal securities laws when they offer and sell up to $1,000,000 of their securities in a 12-month period. The SEC is considering increasing the amount of capital that can be raised under Rule 504 from $1,000,000 to $5,000,000. However, a date for this change has not been announced.

A company can use this exemption so long as it is not a Special Purpose Acquisition Company, or blank check company, and does not have other filing requirements under the Securities Exchange Act of 1934.

However, there are significant limitations in terms of marketing, and the nature of the securities sold.  Companies using Regulation D of Rule 504 for private placements generally may not solicit or advertise their securities to the public. In addition, purchasers of the securities receive “restricted” securities, meaning that they may not sell the securities without registration or an applicable exemption. It is however, noteworthy that there are exemptions to the restrictions.

Our Private Placement lawyers in Florida have been consulted, drafted, and raised capital for companies via private placements in numerous industry including hospitality, entertainment, gaming, and others.

Our South Florida based business law attorneys serve clients in Palm Beach County, Broward County, Miami Dade County, and throughout Florida.

To find out if a private placement under the Rule 504 of Regulation D exemption is right for you, please contact us.

We can help. Call us, we want to hear your story and share our experience.