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On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups (JOBS) Act. This legislation intends to facilitate capital formation in the United States. Part of this legislation includes the CROWDFUND Act, which makes significant changes in current federal and state securities laws.
The CROWDFUND Act will allow entrepreneurs to raise capital by offering to sell interests in their businesses over the Internet. Under the CROWDFUND Act, a small business will be allowed to raise $1 million in a 12-month period by selling its securities to investors without registering that offering with federal or state securities regulators. However, the Act places limitations on how and to whom a small business can sell its securities. The Act directed the Securities and Exchange Commission to adopt rules within 270 days to implement a new exemption to allow securities sales through crowdfunding. Due to the complexities of crowdfunding no rules have been set by the Securities and Exchange Commission. Under current laws, selling a security through crowdfunding is not permitted.
Crowdfunding carries a high degree of risk. As with any investment opportunity it is important to do thorough research. For more information on crowdfunding use the links below. If you have any questions regarding an investment please contact Investor Awareness at 307-777-7370.
Crowdfunding for Investors:NASS.org - Informed Investor Advisory website
Crowdfunding for Small Businesses:Small Business Advisory website
SEC - JOBS Act Information:U.S. Securities and Exchange Commission website