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Syndicate Legal Support Services

(a Professional Services Corporation)

533 South Grand Avenue

Los Angeles, California 90071

Phone: (818) 937-3811

Email: Click Here

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REGULATION D - RULE 504:

Rule 504 of Regulation D provides an exemption from the registration requirements of the Federal Securities Laws for some companies when they offer and sell up to $5,000,000 of their securities in any 12-month period.

A company can use this exemption so long as it is not a blank check company and does not have to file reports under the Securities Exchange Act of 1934. Also, the exemption generally does not allow companies to solicit or advertise their securities to the public, and purchasers receive “restricted” securities, meaning that they may not sell the securities without registration or an applicable exemption.

Rule 504 does allow companies to solicit or advertise their securities to the public and to sell securities that are not restricted, if one of the following circumstances is met:

  • The company registers the offering exclusively in one or more states that require a publicly filed registration statement and delivery of a substantive disclosure document to investors;

  • A company registers and sells the offering in a state that requires registration and disclosure delivery and also sells in a state without those requirements, so long as the company delivers the disclosure documents required by the state where the company registered the offering to all purchasers (including those in the state that has no such requirements); or

  • The company sells exclusively according to state law exemptions that permit general solicitation and advertising, so long as the company sells only to “accredited investors.”

Even if a company makes a private sale where there are no specific disclosure delivery requirements, a Syndicate Legal Services Regulation D - Rule 504 Offering Memorandum will provide sufficient information to investors to avoid violating the antifraud provisions of the securities laws. This means that the information your company provides to investors will be free from false or misleading statements (to the best of our knowledge). 

While companies using the Rule 504 Exemption do not have to register their securities and usually do not have to file reports with the SEC, they must file what is known as a Form D after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s owners and stock promoters but contains little other information about the company.

Bad Actor Disqualification

Rule 504 offerings are subject to the disqualification provisions found in Rule 506 of Regulation D.  The “bad actor” disqualification provisions disqualify offerings from relying on Rule 504 if the issuer or other “covered persons” have experienced a disqualifying event, such as being convicted of, or sanctioned for, securities fraud or other violations of specified laws.

 

To Retain and Engage Syndicate Legal Support Services for a Rule 504 Offering under Regulation D:

 

Syndicate Legal Support Services regularly works with companies and their legal counsel with respect to the drafting of Private Placement Memorandums; we consider it one of our specialties. Along with the complete custom drafting of the entire Regulation D Private Placement Memorandum, our team will proactively assist you in ensuring you have the necessary filing codes to submit the Form D.

The process of drafting the Regulation D Private Placement Memorandum can take anywhere from a couple of days to a couple of weeks, depending on the amount of material and the complexity of the Offering.

Service(s) to be Provided:

  • Drafting & Preparation of a State & Federal Securities Laws Compliant Rule 504 Offering under Regulation D.

    • Our Custom Rule 504 under Regulation D Offering Preparation includes Offering Structuring, Development of a Presentation Grade Private Placement Memorandum ("PPM"), all SEC Filing(s) as required, State filing support (as required), State & Federal Securities Laws Compliance Review,  and access to our Broker-Dealer Network & Institutional Investment Banking Network.

  • Registration of all Form D's with the United States Securities and Exchange Commission for the sale of all Securities by the Company.

RATES:

Rates will be based on an Hourly Rate of $45.00 per hour plus expenses incurred including, but not limited to, postage and purchase of any special software necessary to complete task. Time to complete the job will be estimated and any projects estimated over $200.00 will require a TBD down payment. Syndicate Legal Support Services Bills for Services Rendered each week. Syndicate Legal Support Services requires a signed contract, which outlines the project details, prior to beginning any work. 

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