Rule 505 of Regulation D

Rule 505 of Regulation D (Reg D 505)

Rule 505 of Regulation D is a pouplur way to raise capital, both equity and debt and its allows for the selling of securities not exceeding $5,000,000.

Issuers can:

• Raise up to $5 million in a 12-month (one year)period;
• Security sales can be made to an unlimited number of accredited investor plus 35 additional investors;
• Disclosure documents like an offering memorandum or private placement memorandum, must be delivered to all non-accredited investors;
• Must inform prospective purchasers that they will be receiving “restricted” securities. That is, the securities cannot be held for six months or longer without registering them;
• And more.

 

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