Virginia Approves Intrastate Online Investing Regulations

Virginia’s lawmakers have recently approved a legislation that will allow local businesses to raise equity finance via online investing portals. The bill, which received bipartisan support, does not differ much from what has been proposed in other US states.

In fact, the bill limits digitial investing only to Virginia's residents and companies. It also poses limits on the total amount that companies can raise (up to $ 2 million) and on the maximum investment non accredited investors may invest (up to $ 10,000 in an offering). The bill doesn’t include any specific requirement for intermediary portals. However, it states that the offering shall happen in compliance with the conditions established by the state’s Corporate Commission, which may include:

• Restrictions on the nature of the issuer;
  
• Limitations on the number and manner of offerings;
  
• Disclosures required to be provided to investors, including disclosures of risk factors related to the issuer and the offering;
  
• Requirements that all proceeds received from purchasers be placed in escrow in a Virginia chartered depository institution until the minimum amount of the offering is raised;
  
• Filings with the Commission of notices and other materials related to the offering;
  
• Requirements regarding the preparation and submission of the issuer’s financial statements, including (i) the form and content of such statements and (ii) whether such statements are required to  be audited or reviewed by an independent certified public accountant in accordance with generally accepted accounting principles.
  

The lawmakers also pointed out that the State Corporation Commission shall report each year until 2020 on the implementation of this Act and propose adjustments.


Image credit to: Will Fisher http://bit.ly/1E7YFbo

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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.