FAQ’s - Regulation D a.k.a. Reg D & Federal Securities Law Compliance

Frequently Asked Questions and Answers

• What is Reg D?

The Federal and State securities laws for raising capital are very complicated and involved. However, because Congress recognized a need for small business to have access to raising investor capital it created an “exemption” to all those rules. The exemption, Regulation D, is the principal federal security regulation you must comply with when raising capital from investors. In other words, if you comply with Reg D you are exempt from all the very complicated and very expensive government regulation that you otherwise would need to comply with.

• What does this mean to me?

If you are taking investor money (capital) from any person other than immediate family members ( mother, father, sister, brother) you must comply with the “Reg” D regulations.

• What can I do to comply with Reg D?

There are 6 Rules. Rule 501, Rule 502, Rule 503, Rule 504, Rule 505 and Rule 506. Each rule describes what you must do to meet the exemption. Read it. The Rules are not long and mostly can be understood if you take your time reading them. They are posted on the S.E.C. website and we have information on this website. Recognize that which you don’t understand and seek clarification.

• Must I get permission from the S.E.C before I take any money from investors?

No, However, within 15 days of receiving your first investment check you must file with the SEC what is known as Form D. This is a notice to the SEC that you have accepted investor money. There is no approval process.

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