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Can I use crowdfunding to raise money without violating securities laws in Georgia? What are the requirements?

Crowdfunding in Georgia

Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors. In Georgia, crowdfunding is regulated by the Georgia Securities Act.

Exemption from Georgia Securities Laws

Georgia law provides an exemption from securities registration for certain crowdfunding offerings. Under Georgia law, crowdfunding offerings are exempt from registration if they meet the following requirements:

  • The issuer is a Georgia business or a Georgia resident;
  • The offering is conducted through a registered broker-dealer or a registered funding portal;
  • The aggregate amount of securities sold in reliance on the exemption does not exceed $5 million in a 12-month period;
  • The aggregate amount sold to any investor in reliance on the exemption does not exceed $10,000 or 10% of the investor’s annual income or net worth, whichever is greater, in a 12-month period;
  • The issuer provides certain disclosures to investors, including financial statements and a description of the business and the offering;
  • The issuer files notice with the Georgia Secretary of State at least 10 days before the first sale of securities in the offering.

Requirements for Corporate Name

Georgia law requires that the corporate name of an electric membership corporation contain the words “electric membership corporation” or an abbreviation of such words [1.2].

Securities Issued to Secure Payment of Federal Loans

Under Georgia law, obligations issued to secure payment of federal loans are classified as securities and are exempt from Georgia securities laws [1.1].

Construction of Article as Against Part 1 of Article 1 of this Chapter

Nothing in the Georgia Securities Act repeals, or is intended to repeal, any provision of Part 1 of Article 1 of the Georgia Territorial Electric Service Act [1.3].

Use of Easements

Georgia law allows electric membership corporations to use existing electric easements to provide or expand access to broadband services [1.4]. The installation and operation of broadband services within any electric easement are deemed as a matter of law to be a permitted use within the scope of every electric easement, subject to compliance with any express prohibitions in an electric easement. The owner of an electric easement may use an electric easement to install, maintain, lease, and operate broadband services without incurring liability to the owner or occupant of the real property subject to the electric easement or paying additional compensation to the owner or occupant of the real property subject to the electric easement, so long as no additional poles or other ground-based structures are installed.

Source(s):
Jurisdiction

Georgia, Georgia