Are there state law requirements in addition to federal ones?
Yes! The Federal government and state governments each have their own securities laws and regulations. If your company is selling securities, it must comply with both the Federal and state securities laws. Even if a particular offering is exempt under the Federal securities laws, that does not necessarily mean that it is exempt from a state's laws. Historically states have used a "full disclosure" approach, a "fairness" approach, or both.
The full disclosure approach is comparable to that followed by the SEC. The states require a businesses' securities offerings disclose to investors all information needed to make an informed investment decision, and state officials may review the offering material to see if it omits any apparent issues. Other states analyze public offerings using substantive "fairness standards" designed to assure that the terms and structure of the offerings are fair to investors.
The North American Securities Administrators Association ("NASAA"), Small Corporate Offering Registration ("SCOR") is a simplified "question and answer" registration form that companies can use as the disclosure document for investors in more than 40 states. Even so, you’d better have a lawyer help you!
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