Small Business Information Center Securities
Small businesses generate two-thirds of all new jobs in the United States and are responsible for more than half of our nation's total economic output. In order to grow and expand (and generate even more jobs), small businesses need to secure capital financing. One of the ways small businesses can raise necessary capital is by issuing securities, which are offered for sale to investors either through public offerings or private placements.
The Small Business Information Center is designed for small issuers and various intermediary organizations. Staff is available to explain the various financing options available for smaller firms and to describe the processes required for a small firm securities offering. Staff also is available for pre-filing conferences and to answer any questions small business owners may have about the filing process.
- Small Company Offering Registration — The SEC, through Regulation A, permits unregistered public offerings by a small business of up to $5 million in a 12-month period. An application for registration on Form U-1, Uniform Application to Register Securities, must be filed with the Secretary of State along with Form U-7, Small Company Offering Registration Form (disclosure document) or other offering circular, and filing and examination fees. For more information, please refer to the Form U-7 Instruction Manual. To complement the SEC’s Reg. A, the states sought to develop a simplified, streamlined disclosure document for small businesses (SCOR).
- Testing the Waters — A small business may solicit indications of interest from potential purchasers prior to preparation and filing of a full offering circular.
- Uniform Limited Offering Exemption (ULOE) – State-level equivalent of Reg. D.
- Midwest Regional Review – Participating states have adopted cooperative, reciprocal (disclosure) standards for small stock/securities offerings and small businesses. One state acts as lead state to communicate with other states in the region. Once an offering has been approved for registration, it will be registered in any of the other states in which the application was simultaneously filed.
The Secretary of State, Illinois Securities Department or their information providers shall not be liable regardless of the cause or duration, for any errors, inaccuracies, omissions or untimeliness of the information, or for any delay or interruption in the transmission thereof to the user, or for any claims or losses arising therefrom.