Authored by attorney Jay Rixey
A new Virginia code amendment, effective as of July 1, 2015, makes it easier for small Virginia companies to raise capital by allowing companies to raise up to $2 million through crowdfunding.
The amendment, codified at Virginia Code §13.1-514(21), creates an exemption from the more detailed securities, broker-dealer, and agent registration requirements of the Virginia Securities Act for any security issued by a Virginia entity, as long as the following requirements are met:
To view the Virginia State Corporation Commission regulations, please visit http://law.lis.virginia.gov/admincode/title21/agency5/chapter40/section190/.
The Virginia State Corporation Commission is required to report to the House and Senate on July 1 of each year on the implementation of this new crowdfunding exemption, including (i) updates on federal action; (ii) the number of filings in the Commonwealth made pursuant to this crowdfunding exemption; (iii) the mean, media, and total values related to money raised under offerings made pursuant to this crowdfunding exemption, and (iv) recommendations for revisions.
The state code amendments were effective as of July 1, 2015, and the Virginia State Corporation Commission regulations were effective as of July 31, 2015.
The provisions of this crowdfunding exemption are set to expire on July 1, 2020.
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