Section 4(6) Registration Exemption for Accredited Investors
Section 4(6) provides a registration exemption for offerings to accredited investors, if the aggregate offering amounts up to the dollar limit of Section 3(b) (currently $5,000,000), if there is no advertising or public solicitation in connection with the transaction by the Issuer or anyone acting on the Issuer’s behalf.
The term accredited investor is defined in section 2(a)(15) and generally includes:
- Banks, insurance companies and pension plans;
- Corporations, partnerships and business entities with over $5 million in assets;
- Directors, executive officers and general partners of the issuer;
- Natural persons with over $1 million net worth or over $200,000 in annual income for two years; and
- Entities, all of whose equity owners are accredited.
In addition, the SEC has the power to define as an accredited investor any person, who, on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial matters, or amount of assets under management qualifies as an accredited investor.
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