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Title VPrivate Company Flexibility and Growth

If a company has fewer than 750 shareholders and less than $1 million in assets, long established rules exempt that firm from having to register its securities with the SEC. The JOBS Act revamps these limits to $10 million in assets and either of the following:

  • 2,000 shareholders or
  • 500 nonaccredited investors.

The JOBS Act specifies how the 2,000-person limit is to be calculated. Included in the calculation are persons who received the stock as part of an employee compensation arrangement.

The relaxation of this limit should facilitate the creation and use of online capital-raising tools targeted ...

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