A bipartisan bill allowing crowdinvesting has been recently introduced in the State of Arizona. The document is currently being reviewed and has not been put into effect yet. Once this stage is completed the law will enter into force and intrastate online investing will be possible under the following rules.
Any adult resident of the Arizona State is allowed to invest up to $10,000 per offering unless they are an accredited investor, in which case the rules do not pose any limit.
The legislation allows companies incorporated in Arizona to seek equity capital through online intermediaries up to a maximum of $2.5 million if the firm has undergone a financial audit in the last fiscal year, otherwise the cap drops to $1 million. The offer can last a maximum of 1 year and a minimum of 21 days. Prior to it, issuers, which cannot be investment companies or businesses with still undefined operations, must present a series of documents to the State’s securities commission, including a copy of the disclosure agreement which it intends to provide to potential purchasers. Furthermore issuers have the obligation to inform investors of the risks of the investment and of the illiquidity of the shares.
Arizona’s crowdfunding bill does not pose specific requirements on intermediaries, differently from other intrastate regulations. Once the law enters into effect, Arizona is going to join at least another fifteen US States that have allowed online investing activities with the aim of fostering access to finance for SMEs, while waiting the SEC to release a federal regulation on the matter, as indicated by the JOBS Act signed by President Obama in 2012.
Arizona crowdfunding bill (2015). http://www.azleg.gov/legtext/52leg/1r/bills/hb2591p.pdf
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About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.