Invest Georgia

The Georgia Commissioner of Securities has proposed twelve amendments to investment adviser and broker-dealer rules it promulgated late last year under the Georgia Uniform Securities Act. Although some of the amendments deal with housekeeping issues and typographical errors, several are substantive and of interest to industry participants and their counsel.

A proposed change to Rule 590-4-2-.03 would clarify that Rule 505 Form D filings under the Uniform Limited Offering Exemption must be made within 15 days after the first sale of securities in the state, rather than 15 days prior to the sale, as required by the rule as originally adopted.

The second proposed amendment applies to registration of securities by non-profit entities under Rule 590-4-2-.07, often used for so-called “church bonds.” Under the rule as originally adopted, the application of NASAA Statements of Policy relating to church bonds was permissive rather than mandatory: “The Statements of Policy … may be applied, as applicable, to the proposed offer or sale of a security …” and “may serve as the grounds for the disallowance of the exemption” provided by the Act. Under the amendment, the use of the NASAA Policies is now mandatory, the “may” having been replaced by “shall” in both cases.
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The Georgia Commissioner of Securities recently adopted the “Invest Georgia Exemption,” which will make it easier and less expensive for almost any small business located in Georgia to raise capital from fellow Georgians. Unlike most other securities registration exemptions, the Invest Georgia Exemption allows businesses to engage in public solicitations of investors, provided certain conditions are met.

Any business wanting to raise capital using this new exemption must be a corporation or limited liability company (LLC) organized in Georgia and registered with the Secretary of State. In addition,

The offering of securities must meet the federal exemption for intrastate offerings requirements, Rule 147, meaning all investors must be Georgia residents;
The total amount raised cannot exceed $1,000,000, not including investments from control persons of the business;
Unaccredited investors (as defined by the SEC) may not invest more than $10,000 each. However, there is no investment limitation for accredited investors;
All investments received must be deposited in an institution authorized to do business in the state of Georgia;
The issuer must file a form of notice with the Commissioner briefly explaining the offering. The notice may be filed after sales have been made, unless there is any general solicitation, in which case the notice must be filed prior to the solicitation; and
The issuer must inform the purchaser that the securities have not been registered and that there are resale restrictions.

Articles Tagged with Invest Georgia

Georgia Securities Commissioner Proposes Rule Amendments

New “Invest Georgia Exemption” Helps Small Businesses Raise Capital