Anyone who is forming a start-up company needs to know about Regulation A. Reg A provides an exemption from the registration process associated with a public offering. This can be a big-time and money saver for new companies. Learn how to qualify for Reg A when you are preparing for your offering.
A Look at the Tiers
There are two-tier categories that you should be aware of in relation to Regulation A. The first tier is for offerings that are $20 million or less. The second tier is for those offerings that are $50 million or less. Each of these tiers uses a one-year time frame.
If you are a company that meets the tier one amount, you can proceed under either tier. This provides some flexibility when it comes to meeting the requirements.
More On the Second Tier
Many companies will decide to proceed under the second tier. Here, the business will need to file a Form 1-A. There will also be an ongoing requirement to file financial reports. You should also note that there will be annual investment limits for individual investors. Generally, this amounts to ten percent of a person’s net worth. However, you can take advantage of the fact that there aren’t any resale restrictions and the state registration may be preempted.
If you are not sure which tier is the right fit for you, you can always reach out for help. This is an important decision that should not be taken lightly.
To get more assistance with matters related to Regulation A and Regulation A+, get in touch with EquityTrack by visiting the website at www.equitytrack.co.
