Accredited Investor Definition An individual qualifies as an accredited investor if their net worth exceeds $1 million (excluding primary residence) or have an income surpassing $200,000 (individual) or $300,000 (joint) in the last two years with the expectation of similar income in the current year. Recent SEC rules add individuals holding certain securities licenses (Series 7, 65, 82) as accredited investors.
Other Exemptions and Regulatory Notes • Intrastate Exemption (Rule 147 and 147A):
Offerings confined to Minnesota residents and businesses incorporated/organized in Minnesota may qualify. Requires restrictions on resale and precautions against interstate sales. • Federal Equity Crowdfunding Exemption: Allows companies to raise up to $5 million annually from many small investors via SEC- registered brokers or funding portals, imposing investment limits on non-accredited investors and requiring disclosure about the business and risks. Practical Implications for Minnesota Issuers • Minnesota requires regulatory notice filings for Regulation A Tier 2 offerings, with required documentation mirroring SEC filings. • Minnesota securities laws impose filing fees and merit-based review for securities registrations not federally covered. • Business owners considering any securities offering should seek skilled counsel to navigate federal and state requirements, exemptions, and compliance to avoid civil and criminal penalties. MINNESOTA BLUE SKY LAWS A company selling securities to residents of the state of Minnesota must comply with federal and state securities laws. State securities laws are collectively and individually referred to as “Blue Sky Laws.” These Blue Sky Laws vary among the states, sometimes to a significant degree. It is important to note that the Minnesota Legislature recently enacted a version of the Uniform Securities Act, which provides for substantial revisions to the current version of the Minnesota Securities Act. The Minnesota Uniform Securities Act (“MUSA”) became effective in August 2007. This section highlights the most frequently used exemptions from the securities laws of the state of Minnesota and summarizes certain changes that will result from the enactment of MUSA, where applicable. The securities laws of Minnesota require registration with the Minnesota Department of Commerce of all offers and sales of securities made to residents of Minnesota unless a particular exemption is available. If registration is required, it should be noted that, prior to the passage of MUSA, Minnesota was a “merit” review state, Minnesota is now a “disclosure” only state. Generally, this means that as long as the issuer satisfies the information disclosure requirements under MUSA, the Minnesota Department of Commerce cannot prohibit the issuer from selling its securities within the state.
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