Rule 505 of Regulation D (Reg D 505)
Rule 505 of Regulation D is a pouplur way to raise capital, both equity and debt and its allows for the selling of securities not exceeding $5,000,000.
Issuers can:
• Raise up to $5 million in a 12-month (one year)period;
• Security sales can be made to an unlimited number of accredited investor plus 35 additional investors;
• Disclosure documents like an offering memorandum or private placement memorandum, must be delivered to all non-accredited investors;
• Must inform prospective purchasers that they will be receiving “restricted” securities. That is, the securities cannot be held for six months or longer without registering them;
• And more.