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

Based on the documents provided, crowdfunding can be subject to securities laws in New Jersey, depending on the nature of the offering. The New Jersey Uniform Securities Law (NJUSL) requires that any offer or sale of securities in New Jersey must be registered with the New Jersey Bureau of Securities, unless an exemption applies [1.3].

Requirements for Crowdfunding in New Jersey

There are several exemptions available for crowdfunding in New Jersey, including the federal crowdfunding exemption under Regulation Crowdfunding (Reg CF) [1.3]. To qualify for the Reg CF exemption, the offering must meet certain requirements, including:

  • The offering must be conducted through a registered crowdfunding portal [1.3].
  • The issuer must be a New Jersey business [1.3].
  • The offering must not exceed $5 million in a 12-month period [1.3].
  • The amount of securities sold to any individual investor must not exceed certain limits based on the investor’s income and net worth [1.3].
  • The issuer must provide certain disclosures to investors, including financial statements and information about the offering [1.3].

Conclusion

In summary, crowdfunding can be subject to securities laws in New Jersey, and any offer or sale of securities must be registered with the New Jersey Bureau of Securities, unless an exemption applies. The federal crowdfunding exemption under Regulation Crowdfunding is available in New Jersey, subject to certain requirements. If you are considering crowdfunding in New Jersey, it is important to consult with a qualified securities attorney to ensure compliance with applicable laws and regulations.

Source(s):
Jurisdiction

New Jersey