RIA Compliance Blog
The Georgia Commissioner of Securities recently adopted the “Invest Georgia Exemption,” which will make it easier and less expensive for almost any small business located in Georgia to raise capital from fellow Georgians. Unlike most other securities registration exemptions, the Invest Georgia Exemption allows businesses to engage in public solicitations of investors, provided certain conditions are met.
Any business wanting to raise capital using this new exemption must be a corporation or limited liability company (LLC) organized in Georgia and registered with the Secretary of State. In addition,
- The offering of securities must meet the federal exemption for intrastate offerings requirements, Rule 147, meaning all investors must be Georgia residents;
- The total amount raised cannot exceed $1,000,000, not including investments from control persons of the business;
- Unaccredited investors (as defined by the SEC) may not invest more than $10,000 each. However, there is no investment limitation for accredited investors;
- All investments received must be deposited in an institution authorized to do business in the state of Georgia;
- The issuer must file a form of notice with the Commissioner briefly explaining the offering. The notice may be filed after sales have been made, unless there is any general solicitation, in which case the notice must be filed prior to the solicitation; and
- The issuer must inform the purchaser that the securities have not been registered and that there are resale restrictions.