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Orange County Business Journal Guest Article: An Overview of the New JOBS Act
The Jumpstart Our Business Startups Act (the “JOBS Act”) was signed into law on April 5, 2012. The JOBS Act contains provisions designed to assist small businesses and growing companies in obtaining capital, including permitting general solicitations or advertising when making a private offering, creating an exemption from registration for “crowdfunding,” relaxing requirements for initial public offerings, and increasing the number of shareholders a company is permitted to have before it must register with the Securities and Exchange Commission (the “SEC”).Rule 506 Revisions
The JOBS Act requires the SEC to revise Rule 506 of Regulation D to permit general solicitation or advertising in private offerings, assuming all purchasers are “accredited investors” as defined in Regulation D.
Issuers will have to take “reasonable steps” to confirm accredited investor status.
Excerpted from Orange County Business Journal, September 19, 2012. To view full article, click the PDF linked below.