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

Requirements for Crowdfunding in Pennsylvania

To use crowdfunding to raise money without violating securities laws in Pennsylvania, you must comply with the Pennsylvania Securities Act of 1972 and Title 10 of the PA Code. The act provides exemptions for certain securities offerings, including crowdfunding, but you must meet specific requirements to qualify for these exemptions.

According to [1], you can contact the Pennsylvania Department of Banking and Securities at 1.800.PA.BANKS or 1.800… for more information on offering securities and raising capital.

Crowdfunding Provisions of the JOBS Act

The Jumpstart Our Business Startups (JOBS) Act, enacted in 2012, allows small businesses to raise capital through securities offerings using the internet through crowdfunding. The crowdfunding provisions of the JOBS Act were finalized in 2015, as stated in [2].

Exemptions to Facilitate Intrastate and Regional Capital Raising

The Securities and Exchange Commission (SEC) adopted amendments to Rule 504 of Regulation D under the Securities Act to facilitate issuers’ capital raising efforts and provide exemptions to facilitate intrastate and regional capital raising, as stated in [4]. However, it is important to note that these exemptions have specific requirements that must be met to qualify.

Conclusion

To summarize, you can use crowdfunding to raise money without violating securities laws in Pennsylvania if you comply with the Pennsylvania Securities Act of 1972 and Title 10 of the PA Code. Additionally, the JOBS Act allows small businesses to raise capital through crowdfunding, and the SEC has adopted exemptions to facilitate intrastate and regional capital raising. However, it is crucial to meet the specific requirements for these exemptions to qualify.

Source(s):
Jurisdiction

Pennsylvania