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

Here are the updated requirements for offering equity to investors without violating securities laws in Wyoming:

Intrastate Crowdfunding Exemption

The Intrastate Crowdfunding Exemption allows an issuer to offer or sell securities without registering with the Wyoming Secretary of State or the Securities and Exchange Commission (SEC) if the offer or sale meets all of the following requirements:

  1. The issuer of the security is:
  2. An entity that is incorporated or organized under the laws of Wyoming;
  3. A resident of Wyoming under SEC Rule 147 or Rule 147A; and
  4. Authorized to do business in Wyoming.
  5. The transaction meets the requirements for the federal exemption for intrastate offerings under Section 3(a)(11) of the Securities Act of 1933 and SEC Rule 147 or Rule 147A.
  6. The sum of all cash and other consideration to be received for all sales of the security in reliance on this exemption does not exceed $3,000,000, less the aggregate amount received for all sales of securities by the issuer within the twelve (12) months before the first offer or sale made in reliance on this exemption, if the issuer has not made available to each prospective purchaser and the secretary of state audited financial statements or reviewed financial statements for the issuer’s most recently completed fiscal year, prepared by a certified public accountant, holding a certificate pursuant to W.S. 33-3-109, in accordance with the statements on auditing standards of the American Institute of Certified Public Accountants or the statements on standards for accounting and review services of the American Institute of Certified Public Accountants, as applicable; or $10,000,000, less the aggregate amount received for all sales of securities by the issuer within the twelve (12) months before the first offer or sale made in reliance on this exemption, if the issuer has made available to each prospective purchaser and the secretary of state audited financial statements or reviewed financial statements for the issuer’s most recently completed fiscal year, prepared by a certified public accountant, holding a certificate pursuant to W.S. 33-3-109, in accordance with the statements on auditing standards of the American Institute of Certified Public Accountants or the statements on standards for accounting and review services of the American Institute of Certified Public Accountants, as applicable.
  7. The issuer has not accepted more than $25,000 from any single purchaser unless the purchaser is an accredited investor as defined by SEC Regulation D, who comes within any category listed in the definition of that rule or who the issuer reasonably believes comes within any category listed in the definition of that rule, at the time of the sale.
  8. At least ten (10) days before an offer of securities is made in reliance on this exemption or the use of any publicly available website in connection with an offering of securities in reliance on this exemption, the issuer files a notice with the Wyoming Secretary of State that contains all of the following:
  9. A notice of claim of exemption from registration, specifying that the issuer intends to conduct an offering in reliance on this exemption, accompanied by the filing fee specified in this section;
  10. A copy of the disclosure statement to be provided to prospective investors in connection with the offering.
  11. The issuer requires each purchaser to certify in writing that they understand and acknowledge the risks involved in investing in a high-risk, speculative business venture.
  12. The issuer informs each prospective purchaser that the securities are not registered under federal or state securities laws and that the securities are subject to limitations on transfer or resale.
  13. If the offer and sale of securities under this section is made through an internet website, the issuer provides evidence that it is organized under the laws of Wyoming and that it is authorized to do business in Wyoming, obtains from each purchaser of a security under this section evidence that the purchaser is a resident of Wyoming and, if applicable, an accredited investor, and the website operator files a written notice with the Wyoming Secretary of State that includes the website operator’s name, business address, and contact information and states that it is authorized to do business in Wyoming and is being utilized to offer and sell securities under this exemption.

Exemption from securities registration

Corporations organized under the provisions of the Wyoming Intrastate Crowdfunding Exemption are exempt from registration under, or compliance with, the Wyoming Uniform Securities Act, W.S. 17-4-101 through 17-4-701 [2.1].

Exempt securities

The following securities are exempt from the requirements of W.S. 17-4-301 through 17-4-306 and 17-4-504:

  • A security, including a revenue obligation or a separate security as defined in rule 131 (17 C.F.R. 230.131) adopted under the Securities Act of 1933, issued, insured, or guaranteed by the United States; by a state; by a political subdivision of a state; by a public authority, agency, or instrumentality of one (1) or more states; by a political subdivision of one (1) or more states; or by a person controlled or supervised by and acting as an instrumentality of the United States under authority granted by the congress; or a certificate of deposit for any of the foregoing;
  • A security issued, insured or guaranteed by a foreign government with which the United States maintains diplomatic relations, or any of its political subdivisions, if the security is recognized as a valid obligation by the issuer, insurer, or guarantor;
  • A security issued by and representing or that will represent an interest in or a direct obligation of, or be guaranteed by: (A) An international banking institution; (B) A banking institution organized under the laws of the United States; a member bank of the federal reserve system; or a depository institution a substantial portion of the business of which consists or will consist of receiving deposits or share accounts that are insured to the maximum amount authorized by statute by the federal deposit insurance corporation, the national credit union share insurance fund, or a successor authorized by federal law or exercising fiduciary powers that are similar to those permitted for national banks under the authority of the comptroller of currency pursuant to section 1 of Public Law 87-722 (12 U.S.C. § 92a); or (C) Any other depository institution, unless by rule or order the secretary of state proceeds under W.S. 17-4-205;
  • A security issued by and representing an interest in, or a debt of, or insured or guaranteed by, an insurance company authorized to do business in this state;
  • A security issued or guaranteed by a railroad, other common carrier, public utility, or public utility holding company that is: (A) Regulated in respect to its rates and charges by the United States or a state; (B) Regulated in respect to the issuance or guarantee of the security by the United States, a state, Canada, or a Canadian province or territory; or (C) A public utility holding company registered under the Public Utility Holding Company Act of 1935 or a subsidiary of such a registered holding company within the meaning of that act;
  • A federal covered security specified in section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. § 77r(b)(1)) or by rule adopted under that provision or a security listed or approved for listing on another securities market specified by rule under this act; a put or a call option contract; a warrant; a subscription [1.2].

To offer equity to investors without violating securities laws in Wyoming, you must comply with the requirements of the Intrastate Crowdfunding Exemption. Corporations organized under the provisions of this exemption are exempt from registration under, or compliance with, the Wyoming Uniform Securities Act. Additionally, certain securities are exempt from the requirements of the Wyoming Uniform Securities Act [2.1][1.2].

Source(s):
Jurisdiction

Wyoming