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SEC Form D: Everything You Need to Know

By: Tilden Moschetti, Esq.

Form D is a filing with the Securities and Exchange Commission (SEC) which allows sponsors to sell securities to raise capital under the SEC’s Regulation D (Reg D).

What Is SEC Form D?

Form D is the form filed with the SEC notifying it that a sponsor will be selling securities in accordance with Regulation D. Because Reg D allows for the exempt private placement offering to be filed rather than registered, documents are filed by SEC officials.

Why should I file a Form D with my syndication?

You should file a SEC Form D for your Reg D securities offering because it is the filing itself which puts the offering in the ‘safe harbor’ of Reg D. In fact, the Form D is required by the SEC for sponsors that are using the SEC Reg D exemption. By filing Form D, sponsors are providing the SEC with information about their exempt offering, the company’s executive officers, and themselves, which is essential for compliance with SEC regulations and maintaining transparency with investors. It also enables the SEC to track the number and nature of private offerings.

Additionally, by filing Form D, sponsors are also providing a necessary piece of the notice to state securities regulators, which is important for compliance with state “Blue Sky” laws. Filing Form D helps companies to avoid potential legal issues and penalties for not filing or filing late, and it also enables the SEC to track the number and nature of private offerings.

Form D is used to provide information about the offering and the issuer, such as the type of security being offered, the offering amount, and the number of investors. This information is important for investors to make informed decisions about whether or not to invest in the offering, and for the SEC to monitor the offering and ensure compliance with securities laws.

SEC regulations with which Form D is used to comply

Form D is used to comply with SEC regulations under Reg D of the Securities Act of 1933. Regulation D provides exemptions from the registration requirements of the Securities Act for certain types of securities offerings. These exemptions are intended to facilitate capital raising for small businesses and startups who sell securities while still providing investor protection.

The most commonly used exemptions under Reg D are Rule 504, 506b and 506c. Rule 504 and 506b are exemptions that allow companies to raise a limited amount of money from an unlimited number of investors, while Rule 506c allows companies to raise an unlimited amount of money from a limited number of accredited investors.

What information is in SEC Form D?

The form includes the following information:

  • Issuer’s name and address, as well as the names and addresses of the key officers.
  • The type of security being offered and the offering amount.
  • The number of investors, including the number of accredited investors.
  • The amount of money raised to date
  • Information about any prior sales of securities under Regulation D.
  • A brief description of the business of the issuer and its financial condition
  • Information about any related persons and any compensation arrangements
  • Information about any bad actor disqualification
  • Signature of an authorized person

SEC Form D also requires the issuer to file a general notice filing and an amendment notice filing with the SEC. The general notice filing includes information about the company, the company’s executive officers, and the offering, while the amendment notice filing includes any changes to the information provided in the general notice filing.

The filing deadline for Form D is 15 days after the first sale of securities in a Reg D offering.

The Form D filing requirement applies to companies that are offering or selling securities under one of the exemptions provided by Reg D, including Rule 504, 505, and 506. The form should be filed before or at the time of the first sale of securities, and it must be filed even if the offering does not result in any sales.

Deadline for filing Form D

The filing deadline for Form D is 15 days after the first sale of securities in a Reg D offering.

The Form D filing requirement applies to companies that are offering or selling securities under one of the exemptions provided by Reg D, including Rule 504, 505, and 506. The form should be filed before or at the time of the first sale of securities, and it must be filed even if the offering does not result in any sales.

Not filing Form D or filing it late can result in significant penalties for companies issuing securities in a private offering. The SEC takes compliance with the filing requirements of Form D very seriously, and failure to file the form on time or at all can result in significant fines or other penalties.

The penalties for not filing Form D or filing it late can vary depending on the severity of the violation and the specific circumstances of the case. Some possible penalties include:

  • Civil fines: The SEC can impose civil fines on companies that fail to file Form D on time or at all. The amount of the fine can vary depending on the circumstances of the case, but it can be substantial.
  • Disqualification from relying on Reg D exemption: The SEC can disqualify a company from relying on the Reg D exemption for a certain period of time, which would make it difficult or impossible for the company to raise capital through private offerings.
  • Cease and Desist Order: The SEC can issue a cease and desist order, which would require the company to stop the illegal activity and take steps to prevent it from happening again in the future.
  • Injunctions: The SEC can seek an injunction to prevent the company from continuing to violate the securities laws.
  • Restitution: The SEC can require the company to return any ill-gotten gains to investors
  • Criminal Penalties: In some cases, failure to file Form D may also be considered a criminal offense, which could result in criminal penalties such as fines or imprisonment.

It’s important to note that these penalties are not mutually exclusive, and the SEC can choose to impose one or more penalties depending on the circumstances of the case. Additionally, individual states may have additional penalties for failing to file a Form D or give the appropriate Blue Sky Notice.

Note that the SEC has made it clear that a late filing is MUCH better than no filing at all…

How to file a Form D

Filing an SEC Form D involves several steps that include gathering information, preparing the form, and submitting it to the SEC. Here’s an overview of the process:

  1. Gather information: Before you can file Form D, you will need to gather certain information about your company and the offering. This information includes your company’s name and address, the CIK number, the names and addresses of your company’s directors, officers, and beneficial owners of more than 10% of the securities being offered, the type of security being offered, the offering amount, the number of investors, and information about any prior sales of securities under Regulation D.
  2. Prepare the Form: Once you have gathered all of the necessary information, you can prepare the Form D. The form can be found on the SEC’s website and it can be filled out electronically or manually. Form D includes multiple parts, such as cover page, issuer information, notice of sale, and signature page. It is important to fill out the form completely and accurately to avoid errors.
  3. Submit the Form: Once the Form D is completed, it must be filed with the SEC through the EDGAR system. The filing must be done within 15 days after the first sale of securities in a Regulation D offering. You will need to create an EDGAR account and receive a CIK number to submit the form online.
  4. General Notice and Amendment Notice: In addition to filing Form D with the SEC, issuers must also file a general notice filing and an amendment notice filing. The general notice filing includes information about the company and the offering, while the amendment notice filing includes any changes to the information provided in the general notice filing.

It’s important to note that it’s always recommended that you consult with a syndication attorney about the security offering and how to file.

Make informed decisions about your syndication.

Contact our syndication and private placement memorandum law firm today!