SEC Guidance on Rule 147 Intrastate Offerings & Crowdfunding

Going Public Law

On April 10, 2014, the Securities and Exchange Commission (“SEC”) issued a revised compliance and disclosure interpretation (“C&DIs”) and provided two new questions concerning crowdfunding under the JOBS Act and the intrastate exemption provided by Rule 147 under the Securities Act of 1933, as amended (the “Securities Act”).  Section 3(a)(11) of the Securities Act provides an exemption from the registration statement requirements for any securities offering that is offered and sold only to persons who reside in a single state, where the issuer of the securities is incorporated in and doing business within, the single state.

Rule 147 under the Securities Act (“Rule 147”) provides a safe harbor for offerings conducted in compliance with the requirements of Section 3(a)(11).

Rule 147 requires that the issuer be a resident of, and do business in, the same state in which all offers and sales of securities are made. Additionally, the securities offering may not be offered or sold to any person who is not a resident of such state.

General Solicitation & Advertising In Rule 147 Intrastate Offerings (Question 141.03)

The SEC stated that Rule 147 does not prohibit an issuer from using general advertising or general solicitation in their securities offering; however, any general solicitation or advertising must consistent with Rule 147’s requirement that offers be made only to persons who reside in the state or territory of where the issuer is domiciled and conducts its business.

Issuer Websites to Offer Securities In Reliance Upon Rule 147 (Question 141.05)

This SEC states that issuers generally communicate through their company websites and social media in a broad and indiscriminate manner to the general public.  While the specific facts and circumstances of the particular offering would determine if a communication is an offer of securities, the SEC stated that using an established internet presence to disseminate information about a specific offering would likely involve offers to residents outside the state in which the issuer is domiciled and conducts business.

The Use of Internet Portals In Rule 147 Offerings (Question 141.04)

This SEC states that an issuer claiming an exemption under Rule 147 from the registration statement requirements may use an internet portal to promote its offering to residents of a single state in accordance with a state statute or regulation intended to enable crowdfunding within that state if the portal implements safeguards to ensure that offers of securities are made only to persons residing in the relevant state.  These safeguards must include, at a minimum:

● Disclaimers and restrictive legends setting forth that the offering is limited to residents of the relevant state under applicable law; and

● Limiting access to the offering information to persons who confirm they are residents of the relevant state.

For more information on Smaller Reporting Company Requirements in Going Public Transactions please visit our blog at

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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