Ask Reggi Your Question Now

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

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

Based on the context documents, crowdfunding in Indiana may involve the offer and sale of securities, which are subject to regulation under Indiana securities laws. Crowdfunding issuers must register their securities unless they qualify for an exemption.

Requirements for Crowdfunding in Indiana

Indiana Code does not have specific provisions for crowdfunding. However, crowdfunding may involve the offer and sale of securities, which are subject to regulation under Indiana securities laws.

Securities Registration

Under Indiana Code 23-19-2-1, securities must be registered with the Indiana Securities Division before they can be offered or sold in Indiana, unless an exemption applies. Crowdfunding issuers must register their securities unless they qualify for an exemption.

Exemptions

Indiana Code 23-19-2-4 provides several exemptions from securities registration, including:

  • Securities sold to accredited investors (as defined in Indiana Code 23-19-2-1)
  • Securities sold to no more than 10 non-accredited investors in Indiana in a 12-month period
  • Securities sold in a transaction that meets the requirements of Rule 506 of Regulation D under the Securities Act of 1933
  • Securities sold in a transaction that meets the requirements of Regulation A under the Securities Act of 1933
  • Securities sold in a transaction that meets the requirements of Regulation Crowdfunding under the Securities Act of 1933

Regulation Crowdfunding

Regulation Crowdfunding allows issuers to offer and sell securities through crowdfunding without registering the securities with the Securities and Exchange Commission (SEC), subject to certain conditions.

Under Regulation Crowdfunding, issuers must:

  • Use an SEC-registered intermediary, such as a broker-dealer or funding portal
  • Disclose certain information about the offering and the issuer to investors and the SEC
  • Limit the amount of securities that can be sold to an individual investor in a 12-month period
  • Comply with other requirements, such as restrictions on advertising and solicitation

Indiana Code 23-19-2-4(f) exempts securities sold in a transaction that meets the requirements of Regulation Crowdfunding from securities registration in Indiana.

Conclusion

In summary, crowdfunding in Indiana may involve the offer and sale of securities, which are subject to regulation under Indiana securities laws. Crowdfunding issuers must register their securities unless they qualify for an exemption. Regulation Crowdfunding provides an exemption from securities registration, subject to certain conditions. Issuers should consult with legal counsel to ensure compliance with Indiana securities laws.

[1.1][1.5][1.11][1.12][1.15]

Source(s):
Jurisdiction

Indiana