Financing Your Small Business

Notice Filings of Securities

The National Securities Market Improvement Act of 1996 preempted state registration provisions for transactions that are exempt from registration under Rule 506 of Regulation D of the Securities Act of 1933, but allowed the states to preserve notice filing requirements that are substantially simi­lar to the Rule 506 requirements.

Notice of a Rule 506 offering is accomplished by completing and filing Form D, Notice of Sale of Securities Pursuant to Regulation D, which gives the contact information of the company selling the securities and the details of the offering, to the Securities and Exchange Commission (SEC) in Washington, D. C., and filing a copy of the Form D with each state in which a sale of securities is made. Naturally, the states charge a fee for this notice filing that varies from state to state.

Most states also require the filing of Form U-2, Uniform Consent to Service of Process, which designates the state securities administrator as the person to contact for any complaints lodged against the company selling securities.

A few states also require Form U-2A, Uniform Corporate Resolution, to be filed stating that a corporation's board of directors authorized the sale of the securities.

The following is a comprehensive list of the forms and fees required by the SEC and each state for notice filings under Regulation D, Rule 506. With the exception of Hawaii and New York, all notice filings are made after the first sale of securities in the state. If no sales are made, then no filing is required.

Both federal and state statutes change frequently, particularly filing fee amendments, so it is advisable to check for current information before filing any document.

Figure 5.2: SECURITIES AND EXCHANGE COMMISSION

File one original and four copies of Form D no later than fifteen days after the first sale of securities. There is no filing fee.

File Form D, Form U-2, and the Offering Documents with the Alabama Securities Commission along with a certified or cashier's check for $250 made out to State Securities Commissioner of Alabama no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with State Appendix with the Department of Commerce and Economic Development, Division of Banking, Securities and Corporations along with a check for $600 made out to State of Alaska no later than fifteen days after the sale of securities in the state. The notice filing must be renewed every twelve months.

File Form D with the Arizona Corporation Commission, Securities Division along with a check for $250 made out to Securities Division, Arizona Corporation Commission no later than fifteen days after the first sale of securities in the state.

File Form D with the Arkansas Securities Department along with a fee of Ko of 1% of the maximum aggre­gate offering price at which the securities would be offered in Arkansas, with minimum and maximum fees of $100 and $500, respectively, in the form of a check made out to Arkansas Securities Department no later than fifteen days after the first sale of securities in the state.

File Form D, Form U-2, and the statement, "This fil­ing is pursuant to Rule 506 and §18(b)(4)(d) of the Securities Act of 1933," with the California Department of Corporations along with a check for $150 made out to California Department of Corporations no later than fifteen days after the first sale of securities in the state.

Even though it is not required to make a notice filing in Colorado unless the issuer makes more than ten sales in Colorado, it is strongly recommended that a notice filing be made with the first sale of securities just to let them know that you are making sales in Colorado under Rule 506. File Form D and a cover letter with the Colorado Department of Regulatory Agencies, Division of Securities along with a check in the amount of $75 made out to the Colorado State Treasurer.

File Form D and Form U-2 with the Department of Banking, Securities and Business Investments Division along with a check in the amount of $150 made out to the Connecticut State Treasurer no later than fifteen days after the first sale of securities in the state. In addition, file Connecticut Sales Agent/Broker/Dealer Licensing Questionnaire.

File Form D with State Appendix and Form U-2 with the Secretary of State no later than fifteen days after first sale of securities in the state. There is no notice filing fee in Delaware.

File Form D and Form U-2 with the Division of Securities, Department of Insurance and Securities Regulation along with a check for $250 made out to DC Treasurer no later than fifteen days after first sale of securities in the District.

There is no notice filing requirement in Florida if you are an issuer-dealer or if it is a limited offering defined as no more than thirty-five nonaccredited purchasers with no advertising.

File Form D and Form U-2 with the Georgia Office of Secretary of State, Securities and Business Regulation along with a check in the amount of $250 made out to the Secretary of State no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix, Form U-2, and Form U-2A with the Hawaii Department of Commerce and Consumer Affairs along with a
check or money order in the amount of $200 made out to the Commissioner of Securities, State of Hawaii not later than ten days after the first offer of securities in the state.

File Form D and Form U-2 with the Idaho Department of Finance along with a $50 check made out to the Idaho Department of Finance no later than fifteen days after the first sale of securities in the state.

File Form D with the Illinois Secretary of State, Securities Department along with a check in the amount of $100 made out to the Secretary of State of Illinois no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Indiana Office of Secretary of State, Securities Division no later than fifteen days after the first sale of securities in the state. There is no notice filing fee in Indiana.

File Form D with State Appendix and Form U-2 with the Iowa Division of Insurance, Securities Bureau along with a check or money order in the amount of $100 made out to the Insurance Commissioner of Iowa no later than fifteen days after the first sale of securities in the state.

File Form D with the Kansas Office of Securities Commissioner along with a check or money order in the amount of $1 00 made out to the Securities Commissioner of Kansas no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Kentucky Department of Financial Institutions along with a check in the amount of $250 made out to Kentucky State Treasurer no later than fifteen days after the first sale of securities from or into Kentucky.

File Form D, Form U-2, and Form U-2A with the Louisiana Commissioner of Securities along with a check in the amount of $300 made out to the Louisiana Commissioner of Securities no later than fif­teen days after the first sale of securities in the state.

File Form D with State Appendix and Form U-2 with

Ministrator along with a

Check in the amount of $300 made out to Maine Securities Administrator no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Maryland Office of Attorney General, Division of Securities along with a check in the amount of $100 made out to the Office of the Attorney General no later than fifteen days after the first sale of securities in the state.

File Form D with the Massachusetts Secretary of the Commonwealth, Securities Division along with a check (no personal checks) or money order made out to the Commonwealth of Massachusetts accord­ing to the following schedule no later than fifteen days after the first sale of securities in the state.

Less than $2,000,000 = $250 $2,000,000-$7,500,000 = $500 More than $7,500,000 = $750

File Form D and Form U-2 with the Michigan

Department of Consumer and Industry Services, Corporation, Securities and Land Development

Bureau along with a check or money order in the amount of $100 made out to the State of Michigan no later than fifteen days after the first sale of secu­rities in the state.

File Form D and Form U-2 with the Minnesota

Department of Commerce along with a check or money order in the amount of $50 made out to the State Treasurer no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix with the Mississippi Office of Secretary of State, Business Services

Division along with a check or money order in the amount of $300 made out to the Secretary of State no later than fifteen days after the first sale of secu­rities in the state.

File Form D and Form U-2 with the Missouri Office of the Secretary of State along with a check or money order in the amount of $100 made out to the Director of Revenue, State of Missouri no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Montana State Auditor's Office, Securities Department along with cash or negotiable instrument in the amount of $200 for the first $100,000 of initial issue or por­tion thereof in Montana, based on the offering price, plus '/0 of 1% of any excess over $100,000, with a maximum fee of $1 ,000 made out to the Montana State Auditor, Securities Commissioner no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Nebraska Department of Banking and Finance, Bureau of Securities along with a corporate check or money order in the amount of $200 made out to Department of Banking and Finance no later than thirty days after the first sale of securities in the state.

File Form D with State Appendix with the Nevada Secretary of State, Securities Division along with a cashier's check, certified check, or money order in the amount of $300 made out to the Secretary of State no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix, Form U-2, and Form U-4 (if no broker-dealer is used) (just pages 2,

3, and 4 and original signature, no CRD # required) with the New Hampshire Secretary of State along with a check in the amount of $500 made out to the State of New Hampshire no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the New Jersey Department of Law and Public Safety, Division of Consumer Affairs along with a check or money order in the amount of $250 made out to the State
of New Jersey, Bureau of Securities no later than fif­teen days after the first sale of securities in the state. Form U-2 should appoint the Chief of the Bureau of Securities as the Attorney for Service of Process.

File Form D with State Appendix and Form U-2 with the Regulation & Licensing Department, Securities Division along with a check in the amount of $350 made out to the Securities Division, State of New Mexico no later than fifteen days after the first sale of securities in the state.

Prior to any offer or sale of securities in or from New York:

1. New York State Department of Law. File an orig­inal NY Form 99, a copy of Form U-2 (if an out of state issuer), and a copy of State Notices form with the New York Department of Law along with a certified check or money order according to the following schedule made out to the New York State Department of Law:

Less than $500,000 = $500 More than $500,000 = $1,200

2. New York State Department of State. File a copy of NY Form 99, an original Form U-2 (if an out of state issuer), and an original State Notices form with the New York State Department of State along with a certified check or money order in the amount of $75 made out to the New York State Department of State and a certified check or money order in the amount of $35 made out to the New York State Department of State for the filing of the Form U-2.

File Form D and Form U-2 with the Department of the Secretary of State, Securities Division along with a certified check or money order in the amount of $350 made out to the Office of the Secretary of State no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the North Dakota Office of Securities Commissioner along with a check (no personal checks) in the amount of $100 made out to North Dakota Securities Commissioner no later than fifteen days after the first sale of secu­rities in the state.

File Form D with State Appendix with the Ohio Department of Commerce, Division of Securities and Form U-2 with the Ohio Secretary of State along with a check or money order in the amount of $100 made out to the Division of Securities no later than fifteen days after the first sale of securi­ties in the state.

File Form D, Form U-2, and Form U-2A with the Oklahoma Securities Department along with a check in the amount of $250 made out to the Oklahoma Securities Department no later than fif­teen days after the first sale of securities in the state.

File Form D with State Appendix with the Oregon Department of Consumer & Business Services, Division of Finance and Corporate Securities along with a check in the amount of $225 made out to the Department of Consumer & Business Services no later than fifteen days after the first sale of securities in the state.

File Form D with the Pennsylvania Securities Division along with a check in the amount of $500 made out to the Commonwealth of Pennsylvania no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Rhode Island Department of Business Regulation, Securities Division along with a bank draft or certified check in the amount of $300 made out to the Department of Business Regulation — Securities Division no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the South Carolina Office of the Attorney General, Division of Securities

Along with a certified check, or cashier's check in the amount of $300 made out to the Attorney General of South Carolina no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the South Dakota Department of Commerce and Regulation, Division of Securities along with a check, certified check, or postal money order in the amount of $200 made out to the Division of Securities no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix, Form U-2 and a copy of the offering documents with the Tennessee Department of Commerce and Insurance, Division of Securities along with a check in the amount of $500 made out to the Department of Commerce and Insurance no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix and Form U-2 with the Texas Securities Board along with certified check, cashier's check, or money order in the amount of H0 of 1% of total offering (maximum fee of $500) made out to the State Securities Board no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix and Form U-2 with the Utah Department of Commerce, Division of Securities along with a check in the amount of $60 made out to the Division of Securities no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix and Form U-2 with the Vermont Department of Banking, Insurance, Securities and Health Care Administration along with a check or money order in the amount of $1.00 for each $1 ,000 of the aggregate amount of the offering, with minimum and maximum fees of $400 and $1 ,250 made out to Treasurer of State of Vermont no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix and Form U-2 with the Virginia State Corporation Commission, Division of Securities and Retail Franchising along with a check or money order in the amount of $250 made out to the Treasurer of Virginia no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Washington Department of Financial Institutions, Securities Division along with a check in the amount of $300 made out to the State Treasurer no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the West Virginia State Auditor, Securities Division along with a check or money order in the amount of $250 made out to State Auditor no later than fifteen days after the first sale of securities in the state.

File Form D with State Appendix with the Wisconsin Department of Financial Institutions, Securities Division along with a check in the amount of $200 made out to Office of Commissioner of Securities no later than fifteen days after the first sale of securities in the state.

File Form D and Form U-2 with the Wyoming Secretary of State, Securities Division along with a check in the amount of $200 made out to Secretary of State no later than fifteen days after the first sale of securities in the state.

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