Rule 590-4-2-.03 - Georgia Uniform Limited Offering Exemption(1) Pursuant to the authority delegated to the Commissioner by Section 10-5-12 of the Act, any offer or sale of securities offered or sold in compliance with SEC Rule 505 adopted pursuant to the Securities Act of 1933, including those exempt by application of Rule 508 under the Securities Act of 1933, that is made in accordance with the conditions and limitations set forth below, is determined to be exempt from the registration provisions of Section 10-5-20 of the Act if: (a) No commission, fee, or other remuneration is paid or given, directly or indirectly, to any broker-dealer for soliciting any prospective purchaser in this State unless the broker-dealer is appropriately registered under the Act. It is a defense to a violation of this subsection if the issuer sustains the burden of proof that the issuer did not know and in the exercise of reasonable care could not have known that the person who received a commission, fee, or other remuneration was not properly registered;(b) The issuer shall file with the Commissioner no later than fifteen (15) Business Days after the receipt of consideration or the delivery of a subscription agreement by an investor in this State that is the result of any offer made in reliance upon this exemption:1. A copy of the most recently filed Form D as filed with the SEC, and2. A non-refundable filing fee of $250.00.(c) In all sales to investors, other than Accredited Investors, in this State, one (1) of the following conditions must be satisfied or the issuer and any person acting on its behalf shall have reasonable grounds to believe, and after making reasonable inquiry shall believe, that one (1) of the following conditions is satisfied:1. The investment is suitable for the purchaser upon the basis of facts, if any, disclosed by the purchaser as to the purchaser's other security holdings, financial situation, and needs. For purposes of this condition only, it may be presumed that, if the investment does not exceed ten percent (10%) of the investor's net worth, it is suitable; or2. The purchaser, either alone or with his or her Purchaser Representative or representatives, has the knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment.(d) A failure to comply with a term, condition, or requirement of subdivisions (a), (b) or (c) will not result in loss of the exemption from the requirements of Section 10-5-20 of the Act for any offer or sale to a particular individual or entity if the person relying on the exemption shows: 1. The failure to comply did not pertain to a term, condition, or requirement directly intended to protect that particular individual or entity;2. The failure to comply was insignificant with respect to the Offering as a whole; and3. A good faith and reasonable attempt was made to comply with all applicable terms, conditions, and requirements of subdivisions (a), (b), and (c).(e) The Commissioner, at his or her discretion, may waive one or more conditions of this Rule if the Commissioner determines, upon a showing of good cause, that it is not necessary under the circumstances.(2) In the event the Offering is to continue pursuant to this exemption more than twelve (12) months after the date of the initial filing made pursuant to this exemption, then it shall be necessary for the issuer to file a renewal notice on or prior to the one year anniversary of the original filing date, containing a completed SEC Form D and a non-refundable filing fee in the amount of $100.00.(3) The filings and fees required by this Rule may be made electronically if permitted by the Commissioner.(4) Nothing in this exemption is intended to or should be construed as in any way relieving issuers or persons acting on behalf of issuers from providing disclosure to prospective investors adequate to satisfy the antifraud provisions of Section 10-5-50 of the Act in view of the objective of this section, and purposes and policies underlying the Act.(5) This exemption shall not apply to those transactions offered and sold in reliance upon 506 of SEC Regulation D or any other Offering or security otherwise exempt under Sections 10-5-10 through 10-5-12 of the Act or Rule or Order of the Commissioner.(6) The exemption authorized by this section shall be known and may be cited as the "Georgia Uniform Limited Offering Exemption" or "Georgia ULOE".Ga. Comp. R. & Regs. R. 590-4-2-.03
O.C.G.A. Secs. 10-5-3, 10-5-10, 10-5-12, 10-5-70.
Original Rule entitled "Financial Statements" adopted. F. and eff. July 19, 1965.Amended: ER. 590-4-2-0.5-.03 entitled "Reports" adopted. F. and eff. April 1, 1974, the date of adoption.Amended: Permanent Rule of same title adopted. F. July 5, 1974; eff. July 25, 1974.Repealed: New Rule entitled "Records" adopted. F. Dec. 9, 1980; eff. Dec. 29, 1980.Amended: F. Apr. 13, 1983; eff. May 3, 1983.Amended: F. Feb. 24, 1987; eff. Mar. 16, 1987.Repealed: New Rule of same title adopted. F. Dec. 21, 2004; eff. Jan. 10, 2005. Repealed: New Rule entitled "Georgia Uniform Limited Offering Exemption" adopted. F. Nov. 18, 2011, Dec. 8, 2011. Amended: F. Mar. 9, 2012; eff. Mar. 29, 2012.