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Can I offer equity to investors without violating securities laws in Illinois? What are the requirements?

Requirements for Offering Equity to Investors in Illinois

To offer equity to investors in Illinois, you must comply with the Illinois Securities Law of 1953 [1.1]. The law requires that all securities offered or sold in Illinois be registered with the Secretary of State or be exempt from registration [1.2].

Registration Requirements

To register securities in Illinois, you must file a registration statement with the Secretary of State and provide detailed information about the securities, the issuer, and the terms of the offering. The registration statement must be accompanied by a fee based on the aggregate offering price of the securities [1.2].

Exemptions from Registration

Certain securities offerings are exempt from registration under the Illinois Securities Law of 1953. The most common exemptions include:

  • Private offerings to a limited number of investors who have a pre-existing relationship with the issuer [1.2]
  • Offerings of securities with a minimum investment of $5,000 per investor [1.2]
  • Offerings of securities to accredited investors, such as high net worth individuals and institutional investors [1.2]

To qualify for an exemption, the issuer must meet certain conditions and file a notice with the Secretary of State [1.2].

Penalties for Violations

Violating the Illinois Securities Law of 1953 can result in fines, suspension or revocation of registration, and other penalties [1.2].

Conclusion

To offer equity to investors in Illinois, you must comply with the registration requirements of the Illinois Securities Law of 1953 or qualify for an exemption. Failure to comply with the law can result in significant penalties.

Source(s):
Jurisdiction

Illinois