Question

1. Two Rules (504 and 506) under Reg D relate to the (a) amount of offerings and (b) number of investors. Match Rules 504, 506, or “none” with each of the following:
   1. $5 million offering limit (in a 12 month period)
   2. $5 million offering limit (in a 12 month period)
   3. No limit on the amount of offering (in a 12 month period)
   4. No limit on the number of investors
   5. No limit on number of accredited investors; limit of thirty-five unaccredited investors

Answer 1

Rule number 504

Amount of Offering- Upto $1 million

Number of Investors- Option number D, No limit of number of Investor.

Rule 504 allows a privately held company to raise up to $1 million within a 12-month period. The securities may be offered to an unlimited number of investors, and no specific type of disclosure material is required to satisfy the exemption. In some instances, Rule 504 offerings may be made through public solicitations and the securities sold are not subject to resale restrictions and investor accreditation standards.

Rule number 506

Amount of Offering- Option number C

Number of Investors- Option number D

Rule 506 does not limit the dollar amount of the securities that may be sold in a private placement. As with Rule 505, the securities may be sold to an unlimited number of accredited investors. However, each nonaccredited investor must, either alone or with a purchaser representative, have such knowledge and experience in financial and business matters that the investor is capable of evaluating the merits and risks of the prospective imvestment (or the company must believe at the time the securities are sold that each nonaccredited investor satisfies this requirement).