Key Requirements for
Reg D Offerings
Regulation D provides three exemptions from SEC registration for private placements: Rule 504, Rule 506(b), and Rule 506(c). Rule 504 fits smaller raises up to $10 million in 12 months. Rules 506(b) and 506(c) permit unlimited offering amounts. The main differences are general solicitation, who may invest, and what must be verified. Under 506(b), you cannot generally solicit, and you may include up to 35 non‑accredited but sophisticated investors, with disclosures if there are any non‑accredited investors. Under 506(c), you may generally solicit, but every purchaser must be an accredited investor, and you must take reasonable steps to verify status.
Rule 504, 506(b), 506(c) Offerings
| Feature | Rule 504 | Rule 506(b) | Rule 506(c) |
|---|---|---|---|
| Offering Limit | Up to $10 million | Unlimited | Unlimited |
| Accredited Investors | Unlimited | Unlimited | Unlimited (Must verify accreditation) |
| Non-Accredited Investors | Unlimited | Up to 35 (must be sophisticated) | Not allowed |
| General Solicitation | Permitted with restrictions (e.g., state registration or accredited-only sales) | Prohibited | Permitted (must verify all investors are accredited) |
| Disclosure Requirements | Varies by state; may require registration and disclosure documents | Disclosure required if non-accredited investors involved | Standard disclosures; must comply with Blue Sky notice filing |
| SEC Filing | Form D within 15 days of first sale | Form D within 15 days of first sale | Form D within 15 days of first sale |
| Resale Restrictions | Securities are restricted unless registered or exempt | Securities are restricted; resale must meet Rule 144 | Securities are restricted; resale requires further compliance |
| Blue Sky Compliance | Required in states where offered unless exempt | Blue Sky notice filings and fees typically required | Blue Sky notice filings and fees apply |
| Verification of Investors | Not required | Not required | Required ("reasonable steps" to verify) |
Stay Compliant, Stay Confident
Meet the specific requirements for Reg D 506(b), 506(c), and 504, and you can unlock the flexibility of Regulation D while staying aligned with SEC rules and state Blue Sky filings. Keep timelines tight, track investor status and flows, file the Form D on time, and complete any required state notices and fees to avoid delays and surprises.
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