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Corporations, limited liability companies and limited partnership are subject to the securities laws because they are offering ownership
interests in a business. You must comply with federal and state securities
laws or you will face criminal penalties including jail sentences and monetary fines.
Federal and state securities laws are complex and require legal advice.
The big picture is that if you have owners in multiple states, you need to follow federal SEC rules. If
everyone is in one state, you follow that state's rules. If ALL investors have full knowledge and are
sophisticated investors (i.e. they are not investing their life savings in a get-rich quick scheme),
you can be exempt from state filings. But if even one person doesn't qualify, your exemption will be void.
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Please be aware that the
law requires that purchasers be
given full
and accurate disclosure of all material aspects concerning the business they are purchasing an interest in.
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| You are exempt if: |
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Claim of Exemption
You can file this form with no fees IF you comply with the following exemption:
(58-13B-27 Paragraph K of the New Mexico Statutes)
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(1) in the case of a corporation or limited liability company, the total number of security holders does not and will not in consequence of the sale exceed 25 or, in the case of a limited partnership, the number of limited partners does not and will not in consequence of the sale exceed 25; |
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(2) the issuer reasonably believes that all buyers are purchasing for investment; |
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(3) no public advertising or general solicitation is used in connection with the offer or sale; and |
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(4) no commission or other remuneration is paid or given, directly or indirectly, for soliciting or selling to any person in this state except to broker-dealers and sales representatives licensed pursuant to the New Mexico Securities Act of 1986 [Chapter 58,
Article 13B NMSA 1978]. |
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| See an attorney |
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If you do not meet these rules, please see a business attorney for the correct steps to take
to comply with securities regulations. |
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