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What is a Regulation D Offering and How Does it Apply to You the Small Business Person?

Jul 25, 2008
What is a Regulation D Offering? This is a simple question with a not so simple answer. Basically, a regulation D offering allows a small business person the opportunity to raise capital and sell parts of the business without having to register with the Securities and Exchange Commission. Registering with the SEC can be an expensive and time consuming process, something that small businesses in need of capital probably do not have available to them. The question should not really be what is a regulation D offering, rather why would someone want to go through with one.

Answering What is a Regulation D Offering

When the Securities Act of 1933 was put into place it was an attempt to document and control and offers to sell securities. What this act did not take into account was how it would affect smaller corporations and businesses that could not afford, either with time or money, registering with the SEC. Regulation D came into place to make it easier for smaller companies to raise capital for their businesses.

A regulation D allows the small business owner to easily and quickly acquire funds without interference from the federal government. There are stringent regulations on what is regulation D offering, most of which correspond to the amount of capital being acquired. Regulation D offerings are limited to less than five million dollars and must have less than thirty five investors.

In order to file a regulation D a company must fill out a form D immediately after they first sell their securities. You should know what is a regulation D offering before you begin getting capital to ensure that you are following proper federal regulations. Contact the SEC's office of Investor Education and Advocacy at 202-551-8090 or send an email to publicinfo@sec.gov to find the answer to your question. They can most fully assist you to determine whether you qualify and can apply for a Regulation D Offering.

In addition, check with your local state securities regulator to see if there is anything additional that is required by the state. Their address number and telephone number by contacting the North American Securities Administrators Association at 202-737-0900 or by going to their website.

In addition, most of this information is freely available in your local phonebook. Check the government section and you should be able to your state contact information. Follow these steps to ensure that your company is in compliance. Hopefully this has answered your question as to what is a Regulation D Offering.
About the Author
Kathryn R. Landry is a business writer for TIC Advisors, Inc . A company that can give you the most complete information on a 1031 exchange or TIC property ownership .
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