State Securities Laws

State securities laws are designed to provide investors with information needed to make an informed investment decision. Additionally, they are designed to protect investors from being victimized by dishonest promoters of fraudulent business schemes posing as legitimate business enterprises.

In order to comply with state securities laws, you must disclose in the SCOR Form all material information about the Company that a typical investor would want to know before making an investment in the Company. Many state securities laws also require Company promoters to share the potential risks and rewards of holding stock in the Company fairly with public investors. If you file an application to register the company’s securities in those states, examiners will review the Company’s offering for compliance with substantive standards.

The Company will receive comments from examiners in states in which the SCOR Form is filed. Comments may be limited to requests for disclosure of additional information or may require that certain terms of the offering be modified to comply with a state’s substantive standards. Failure to resolve outstanding comments can lead to denial of an application for registration.

If the Company intends to offer its securities in two or more states within a geographic region, you should contact those states to determine if the Company can request regional review. By requesting regional review, the Company will, in most cases, confer with a lead jurisdiction that will coordinate the review and comments of all states within the region in which the Company intends to offer its securities. Click here to learn more about the various regional review programs.

Prior to completing the SCOR Form, you may wish to contact your local securities regulator to review applicable standards. It may be possible to arrange a pre-filing conference.

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