REGULATORY CONSIDERATIONS
SECURITIES REGISTRATION
Minnesota law broadly defines a security as any interest or obligation issued by a business entity, including stock, partnership interests, bonds, and other financial instruments. The label given to ownership interests doesn’t determine their legal status as securities. Registration and Compliance • Federal and State Registration: Generally, securities must be registered with the U.S. Securities and Exchange Commission (SEC) and/or the Minnesota Department of Commerce before being offered or sold, unless an exemption applies. • State Filing Requirements: • Minnesota requires registration or exemption documentation for securities offered or sold within the state. • Applications must meet detailed disclosure and merit review standards. • Registration fees apply: $100 plus 0.1 percent (one-tenth of one percent) of the offering amount, capped at $300 in total, plus $25 for amendments. Legal Effects: • Violations of securities laws can lead to civil and criminal penalties on federal and state levels. • Applicable anti-fraud provisions apply, even if a security or transaction is exempt from registration.
Exemptions: Registered Offerings Under 2015 Regulation A Plus
The JOBS Act of 2012 significantly expanded the scope of Regulation A offerings, raising the ceiling from $5 million to $50 million. In 2015, the SEC adopted "Regulation A Plus," dividing offerings
into two tiers to ease compliance and promote capital formation: • Tier 1 : Up to $20 million in offerings within a 12-month period. • Tier 2: Up to $75 million in offerings within a 12-month period.
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