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

Crowdfunding in Kentucky

Kentucky allows crowdfunding under certain conditions. The Kentucky Department of Financial Institutions (DFI) regulates securities offerings in the state, including crowdfunding.

Securities Laws in Kentucky

In Kentucky, crowdfunding is regulated under the Kentucky Securities Act (KSA). The KSA requires that all securities offerings in the state be registered with the DFI or qualify for an exemption from registration.

Crowdfunding Requirements in Kentucky

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

  1. Use a Kentucky-based crowdfunding platform that is registered with the DFI.
  2. Limit the offering to Kentucky residents only.
  3. File a notice with the DFI at least 10 days before the offering begins.
  4. Provide investors with a disclosure document that includes information about the offering and the risks involved.
  5. Limit the amount of money raised to $2 million in a 12-month period.

Conclusion

To use crowdfunding to raise money in Kentucky, you must comply with the state’s securities laws and regulations. This includes using a Kentucky-based crowdfunding platform, limiting the offering to Kentucky residents, and filing a notice with the DFI. Additionally, you must provide investors with a disclosure document and limit the amount of money raised to $2 million in a 12-month period.

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Source(s):
Jurisdiction

Kentucky