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

Crowdfunding in Hawaii: Requirements and Securities Laws

Crowdfunding is a popular way for small businesses to raise capital. However, it is important to comply with securities laws to avoid legal issues. In Hawaii, crowdfunding is regulated by the Hawaii Department of Commerce and Consumer Affairs (DCCA) and the Securities Enforcement Branch.

To use crowdfunding to raise money in Hawaii, you must comply with the following requirements:

  1. Register with the DCCA: Issuers must register with the DCCA and file a notice of exemption before offering or selling securities through crowdfunding [2].
  2. Use a registered intermediary: Issuers must use a registered intermediary, such as a broker-dealer or funding portal, to offer and sell securities [2].
  3. Limit the amount of investment: Investors are limited to investing a maximum of $5,000 per offering, and issuers are limited to raising a maximum of $2 million per year [2].
  4. Disclose information: Issuers must provide investors with certain information, including financial statements, business plans, and risk factors [2].
  5. Prohibit certain individuals from participating: Individuals and companies that have criminal records or have violated securities laws are precluded from using the exemption [2].

If you comply with these requirements, you can use crowdfunding to raise money in Hawaii without violating securities laws.

Conclusion

To summarize, if you want to use crowdfunding to raise money in Hawaii, you must comply with the requirements set by the DCCA and the Securities Enforcement Branch. These requirements include registering with the DCCA, using a registered intermediary, limiting the amount of investment, disclosing information, and prohibiting certain individuals from participating. By following these requirements, you can raise money through crowdfunding without violating securities laws in Hawaii.

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Source(s):
Jurisdiction

Hawaii