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Securities & Investment Regulation
OTHER PFR AGENCIES
When a company intends to offer and sell securities, it must either register those securities with the Maine Office of Securities or qualify for an exemption from registration. In addition, the company must determine whether its securities require federal registration with the Securities and Exchange Commission (SEC) . An important fact to remember is that, even though a small business offering might be exempt from SEC registration, it does not necessarily qualify for a State exemption. Another critical point is that an issuer must comply with the registration/exemption requirements of each state in which it intends to offer and sell securities.
Because the costs of a registration can often be prohibitive for small businesses, various programs have been established at both the federal and state levels to streamline the process:
Small Company Offering Registration (SCOR)
The SCOR program is available to businesses selling up to $1,000,000 in securities during any 12-month period. SCOR securities are exempt from federal registration, may be sold through general solicitation and advertising, and have no trading restrictions. This program is designed to reduce the preparation costs for the small company trying to raise capital. For more information, you should visit SCOR: A Simplified Method for the Public Offering of Securities . To access the Form U-7 registration document or the manual for its completion, visit the Web site of the North American Securities Administrators Association (NASAA) . The U-7 is also available from the Office of Securities, on request, in various word processing formats.
New England Regional Review for SCOR
The six New England states (Maine, New Hampshire, Vermont, Massachusetts, Connecticut, and Rhode Island) participate in a program designed to lessen the registration burdens for small companies who file in more than one state. Under this program, the issuer submits its registration materials to each state, but deals directly with just one lead state, which will coordinate the comments regarding the offering from all participating states. All six states utilize the Form U-7 as the registration statement for SCOR securities. To request Regional Review, the issuer must complete the Regional Review Application Form and send it to each state in which it intends to offer and sell securities. For this and other forms please visit our Forms page.
If you are considering offering in additional states, check out the Midwest Regional Review Program (Wisconsin, Illinois, Indiana, Iowa, Kansas, Michigan, Missouri, Nebraska, North Dakota and South Dakota) and the Western Regional Review Program (Alaska, Arizona, Nevada, Colorado, Idaho, Montana, Utah, New Mexico, Oregon & Washington). If you are considering offering on a National basis check out the Coordinated Equity Review Program .
There are many factors which affect the requirements for registration of securities or qualification for an exemption from registration. At both the state and federal level, such issues as the amount of money being raised, the number of security holders in the company, the method of solicitation of potential investors, and the financial profile of those investors, all can play an important part in determining the pertinent legal requirements. Subchapter 2, §16201 & §16202 of the Maine Uniform Securities Act detail the available state exemptions. In addition to complying with the legal requirements of the State of Maine, remember that a company must also comply with applicable federal requirements, as well as those of each state in which offers and sales will be made. You can get more information regarding federal requirements for small businesses through the SEC's Small Business Information site. Remember that, before proceeding with any securities offering, you should consult with experienced legal counsel to advise and assist you in complying with these requirements.
Last Updated: June 17, 2013
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