On November 3 the U.S. House of Representatives passed H.R. 2930 (the “Entrepreneur Access to Capital Act”) and H.R. 2940 (the “Access to Capital for Job Creators Act”).
H.R. 2930, the “crowdfunding” bill, would amend the Securities Act of 1933 (the Act) to add new Sections 4(6) and 4A which would exempt from the registration requirements of Section 5 of the Act transactions where the aggregate amount of securities sold by an issuer in a 12 month period does not exceed (a) $1,000,000 or (b) $2,000,000 if the issuer provides potential investors with audited financial statements. However, an offering would not qualify for the foregoing exemption if the amount sold to any individual investor in reliance on the exemption exceeds the lesser of (i) $10,000 and (ii) 10% of such investor’s annual income. Securities sold pursuant to the exemption may not be resold for one year unless such securities are sold to the issuer or to an “accredited investor”, as defined in Rule 501(a) under the Act.
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