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Can I offer equity to investors without violating securities laws in Connecticut? What are the requirements?

Offering Equity to Investors in Connecticut

To offer equity to investors in Connecticut, you must comply with the Connecticut Uniform Securities Act [1.2]. Section 36b-16 of the Act requires the registration of any security prior to offer or sale unless the security or transaction is exempted under section 36b-21 or is a covered security [1.2].

Section 36b-21 of the Act provides exemptions from registration requirements for certain securities and transactions, including but not limited to:

  • Securities issued by the United States government or any agency or instrumentality thereof [1.2].
  • Securities issued by a foreign government with which the United States maintains diplomatic relations [1.2].
  • Securities issued by banks, savings institutions, trust companies, and other financial institutions [1.2].
  • Securities issued in certain non-public offerings [1.2].

It is important to note that the exemptions provided by section 36b-21 are subject to certain conditions and limitations [1.2]. Therefore, it is recommended that you consult with a legal professional to ensure compliance with all applicable securities laws and regulations.

Additionally, if you plan to make a tender offer involving a target company, you must comply with section 36b-46 of the Act, which prohibits fraudulent, deceptive, or manipulative acts or practices in connection with a tender offer [6.2].

In summary, to offer equity to investors in Connecticut, you must comply with the registration requirements of section 36b-16 of the Connecticut Uniform Securities Act, unless the security or transaction is exempted under section 36b-21 or is a covered security. It is recommended that you consult with a legal professional to ensure compliance with all applicable securities laws and regulations.

[1.2]: 36b CTGS 16 [6.2]: 36b CTGS 46

Source(s):
Jurisdiction

Connecticut