Intrastate offering enables your business to sell stock within one state.
Intrastate offering financing is a very unique method for financing a business. It allows your business to sell stock as long as it only sells to investors within one specific state. Since the securities are only able to be purchased within the state they are issued, companies can avoid SEC registration requirements. An intrastate offering is not within the jurisdiction of the SEC, but it does have to comply with state regulations.
If your business is going to proceed with an intrastate offering, it is advised that you consult an attorney and a good CPA to step you through the whole process. You do not want to get your business into a bad situation by not being prepared. If done right though, this can be an excellent method for raising business capital.
An intrastate offering meets exemption requirements if:
• Only residents of the state purchase securities
• The company issuing the securities is registered in the state
• A considerable amount of business is done in the state (typically more than half of the revenue)
• The number of investors(security holders) is under 500
Intrastate offerings are less expensive than having to register with the SEC. If your business meets all of the above requirements then it might be beneficial to use an intrastate offering instead of a traditional IPO.
For additional business financing sources, we encourage you to browse our free business capital search engine today.