Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

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

Offering Equity to Investors in Louisiana

Louisiana Securities Law defines a security as any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or, in general, any interest or instrument commonly known as a “security” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the foregoing [1.1].

Requirements for Offering Equity

If you plan to offer equity to investors in Louisiana, you may need to comply with the Louisiana Securities Law. The law requires that securities be registered with the Louisiana Securities Commission unless they are exempt from registration [1.1].

There are several exemptions from registration, including:

  • Private offerings to a limited number of investors
  • Offerings to accredited investors
  • Offerings of securities issued by a government or governmental agency
  • Offerings of securities issued by a nonprofit organization [1.1]

Additional Information

The Louisiana Securities Law also provides information on the investment of corporate funds in any type or character of equity or investment securities by a trust company [2.1]. Additionally, the law provides information on advertising for public sale of securities and private sale of securities [3.1]. The law also provides information on security interests by public entities [3.2]. Finally, the law supersedes all other laws of the state of Louisiana relating to the issuance, execution, registration, transfer, and payment of securities of public entities in fully registered form [1.3].

Conclusion

Offering equity to investors in Louisiana may be subject to securities laws. You should consult with a securities attorney to determine whether your offering is exempt from registration or whether you need to register your securities with the Louisiana Securities Commission.

Source(s):
Jurisdiction

Louisiana