Private placements of stocks, also known as
securities, are offered under the SEC Rules of
Regulation D also known as Reg D.
Private placements usually consist of stocks.
A Regulation D private placement offering is usually under Rule
504 or Rule 506. A private placement memorandum is usually a
Regulation D Rule 506 offering of private placement stock. A
Regulation D offering should be accompanied with a PPM (Private
Placement Memorandum).We assist companies with the preparation
of Private Placement Memorandums.
Regulation D is one way to be exempt from the SEC registration process, which is through what is called a private placement. In the past there were exemptions available through the Securities Act of 1933, but the provisions were very vague, and a risky endeavor for business owners.
When companies issue out stock, also known as securities, the
securities must be registered with the SEC. Registration
documents include detailed disclosure, financial statements,
audits, etc. The total process requires the professional help of
attorneys, accountants, and the Securities Exchange Commission
review which can last up to 120 days. This can be a costly
expense, even before the stock offering brings in any capital.
All the above reasons created the need for private
The SEC put together objectives and rules for exemptions to
take place in 1982 when they adopted Regulation D. Private
placements offers under Regulation D rules have become a
very popular method for small companies to raise money through
private investors. Reg D does not make you a public company.
Regulation D allows Corporations and Limited Liability
Corporations of small size to sell stock using a Private
Placement Memorandum (PPM). This is a great way to raise funds
quickly and effectively, and it allows you to raise money
through friends and family. There are few firms that are
knowledgeable enough to help companies go through the process of
a Regulation D offering, as it can be very complex.
If you are contemplating using Regulation d and doing a private
placement or need additional information on private placements
we would be happy to assist you. If you need assistance with a
Private Placement Memorandum or PPM we can help.