SEC Reporting & Registration Requirements for Entrepreneurs
The JOBS Act imposes certain requirements for companies seeking to utilize the crowdfunding exemption.
Important: If you treat this process lightly and are not prepared in time, once its legal to launch on Funding Portals or with other Intermediaries, you will play catch up with the reporting and disclosure process, delaying your ability to potentially raise capital from the crowd and get funded faster!
Companies must file with the SEC, the Intermediary, and all potential investors a complete and accurate disclosure document that will include at a minimum the following information:
- Registration & Incorporation in the U.S. Name, legal status, address, website, etc.
- Names of directors, officers, and 20% stockholders
- A description of the business and the anticipated business plan of the issuer
- Prior year tax returns
- Financial statements
- Description of intended use of raised capital & proceeds
- Target offering amount, deadline, and regular progress updates through the life of the offering
- Share price and methodology for determining the price
- A description of the ownership and capital structure of the issuer, including a lot of detail about the terms of the securities being sold,
- The terms of any other outstanding securities of the company, including a summary of the differences between them
- And such other information as the Commission may, by rule, prescribe, for the protection of investors and in the public interest
Financial statements of the issuer, must be certified by the principal executive officer of the issuer to be true and complete in all material respects;
If you are raising more than $100,000, but not more than $500,000, financial statements must be reviewed by a public accountant who is independent of the issuer, using professional standards and procedures established by the SEC, and if you are raising more than $500,000 (or such other amount as the SEC may establish), you will need audited financial statements.
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