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

To offer equity to investors in Georgia, you must comply with the state’s securities laws. The Georgia Securities Act requires the registration of all securities offerings unless an exemption applies ^[2.1]. Certain securities are exempt from registration under the Georgia Securities Act ^[2.1]. These include securities issued, insured, or guaranteed by the United States, a state, or a political subdivision of a state; securities issued by a foreign government with which the United States maintains diplomatic relations; securities issued by certain financial institutions, including banks and insurance companies; and securities issued by certain nonprofit organizations ^[2.1]. Even if an offering is exempt from registration, certain requirements must be met. For example, issuers must file a notice with the Commissioner of Securities specifying the material terms of the proposed offer or sale and provide copies of any proposed sales and advertising literature to be used ^[2.1]. It is important to note that the exemptions from registration are narrowly construed and the burden of proving the exemption’s application falls on the issuer ^[2.1]. Violating Georgia’s securities laws can result in civil and criminal penalties ^[3.2]. Therefore, it is recommended that you consult with a securities attorney to ensure compliance with Georgia’s securities laws.

Source(s):

• [2.1] Exemptions from registration of securities.
• [3.2] Unlawful practices with offer, sale, or purchase of security.

Jurisdiction

Georgia, Georgia

• General