The Jumpstart Our Business Startups (JOBS) Act was passed by Congress and signed into law by President Barack Obama to encourage funding of small businesses and startups in the US. Comprising seven titles, it was designed to relax federal regulations and allow for equity crowdfunding, making it easier for companies to access funding while giving individuals a chance to invest in private companies.
The Access to Capital for Job Creators and Crowdfunding acts make up Titles II and Titles III, which are the two key sections of the JOBS Act. Their goal is to lower the barrier for accessing financing for startups. Title II spawned Rule 506(c) of Regulation D, a securities exemption that lets companies publicly advertise investment offerings, which are then open to investment from high net-worth individuals—also known as accredited investors. Meanwhile, Title III of the JOBS Act allows individuals with a net worth below $100,000 to buy shares in privately held companies that want to raise up to $1 million in a 12-month period.
Title IV, the Small Company Capital Formation Act, updates Regulation A as a means of lowering compliance costs to make it easier for small public offerings of securities—not exceeding $5 million in any 12-month period—to register with the Securities and Exchange Commission (SEC).
As for Title I of the JOBS Act, this is also known as the Reopening American Capital Markets to Emerging Growth Companies Act, while Titles V to VI cover registration and deregistration requirements pertaining to the Exchange Act. Title VII is also called the Outreach on Changes to the Law or Commission.
Companies conducting an equity crowdfunding offering are required to file Form C (Crowdfunding) with the SEC as well as disclose certain information to investors. This information includes the price of the securities; the target offering amount; the company’s financial status; financial statements; information on officers, directors and various owners; as well as an annual report.
With nearly 50 years of global regulatory experience, and as one of the first companies to actively engage with the XBRL filing program, Merrill is uniquely qualified to help filers worldwide successfully navigate ever-changing global compliance requirements. With Merrill, you can manage regulatory disclosures with absolute security, precision and accuracy.