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

Offering Equity to Investors in South Dakota

To offer equity to investors in South Dakota, you must comply with the securities laws of the state. The South Dakota Codified Laws provide exemptions for certain securities from registration requirements [1.1]. However, it is important to note that offering equity to investors may not fall under any of the exemptions provided by the state.

One exemption that may be relevant is if the offer or sale is not made in the state of South Dakota [2.1]. Additionally, the security being offered may be exempt from registration under §§ 47-31B-201 through 47-31B-203 or may be registered under the South Dakota Securities Act [1.2].

Requirements for Investment Adviser Registration

If your offering is not exempt, you must register with the state as an investment adviser [3.2]. To register as an investment adviser in South Dakota, you must comply with the requirements set forth in the South Dakota Securities Act [3.2].

If you are required to register, you must file an application with the state and pay the required fees [3.2]. You must also comply with post-registration requirements, including financial reporting, record-keeping, and audits or inspections [3.3].

It is important to note that offering equity to investors is a complex process that requires careful consideration of securities laws and regulations. It is recommended that you consult with a securities attorney before proceeding with any offering.

[1.1]: SDCL 47-31B-201 [2.1]: SDCL 37-5B-3 [1.2]: SDCL 47-31B-301 [3.2]: SDCL 47-31B-403 [3.3]: SDCL 47-31B-411

Source(s):
Jurisdiction

South Dakota