Rule 506c - Securities Exemption

The video discusses a Post JOBS Act exemption that facilitates fundraising by removing the general solicitation prohibition, allowing companies to advertise their issuances. It compares this exemption to Rule 506B, highlighting that while it allows unlimited investors and funds, all investors must be accredited. Companies must ensure compliance to maintain the exemption, which is also exempt from state law. Despite the benefits, companies must avoid transactions with non-accredited investors.

What major change did the Post JOBS Act exemption introduce for companies?

• It removed the general solicitation prohibition.

• It limited the number of investors to 50.

• It allowed companies to issue stocks without any restrictions.

• It required all investors to be non-accredited.

What is a key similarity between the Post JOBS Act exemption and Rule 506B?

• Both allow unlimited investors and issuance value.

• Both require a minimum of 100 investors.

• Both are applicable only to public companies.

• Both require state law compliance.

What must companies ensure to maintain the exemption under the Post JOBS Act?

• The company must be publicly listed.

• The issuance must be limited to $1 million.

• All investors must be accredited.

• All investors must be non-accredited.

What document must still be provided to investors despite the exemption from state law?

• A private placement memorandum

• A stock certificate

• A shareholder agreement

• A public offering statement

What is a limitation of the Post JOBS Act exemption regarding investor offers?

• Offers are limited to a maximum of 10 investors.

• Offers must be made only to accredited investors.

• Offers must be approved by the SEC.

• Offers can be made to non-accredited investors.