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LSDefine

Simple English definitions for legal terms

Rule 504

Read a random definition: for sale by owner

A quick definition of Rule 504:

Rule 504 is a rule made by the Securities and Exchange Commission (SEC) that allows companies to sell up to $5,000,000 in securities to an unlimited number of buyers in a private placement. This means that they don't have to register with the SEC, which can be a long and expensive process. However, Rule 504 is not very popular because the $5,000,000 limit is too low for many big companies. Instead, they usually use Rule 506, which has fewer restrictions and no limit on the amount of securities that can be sold. But if a company does use Rule 504, they can advertise their securities and don't have to give buyers a lot of information or restrict them from selling the securities later on. However, state laws may still require some disclosures and restrictions on reselling the securities.

A more thorough explanation:

Rule 504 is a regulation created by the Securities and Exchange Commission (SEC) that allows companies to sell up to $5,000,000 in securities to an unlimited number of buyers in a private placement. This means that companies can sell shares of their company to investors without having to register with the SEC.

Normally, companies that want to sell securities must file a registration statement with the SEC. However, Rule 504 allows companies to avoid this requirement if they comply with certain rules.

One of the main advantages of Rule 504 is that it allows companies to sell securities to a large number of investors without having to go through the time-consuming and expensive process of registering with the SEC. However, because of the $5,000,000 cap, Rule 504 is not commonly used by larger companies.

Compared to other SEC regulations, Rule 504 has fewer restrictions. For example, companies can generally advertise their securities to potential investors, and there are no restrictions on reselling the securities. However, state securities laws may still require companies to disclose certain information to investors and may restrict the resale of securities.

Imagine that a small startup company wants to raise money to fund its operations. The company decides to sell shares of its company to investors in a private placement under Rule 504. Because the company is only looking to raise $1,000,000, it is able to do so without having to register with the SEC.

The company is able to advertise its securities to potential investors and is not required to disclose any information to them. However, the company must comply with state securities laws, which may require it to provide certain disclosures to investors.

Overall, Rule 504 allows small companies to raise money from a large number of investors without having to go through the time-consuming and expensive process of registering with the SEC.

Rule 144A | Rule 506

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Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
WorthlessAttractiveZombie
7:44
My berkeley paragraph finally disappeared. I definitely think it is just an indicator that they are actively reviewing files, and does not mean anything about A, WL, or Rs
WorthlessAttractiveZombie
7:46
Also has anyone's date disappeared for W&L? Mine did last night
7:55
@WorthlessAttractiveZombie: mine did yesterday morning
7:56
Oops sorry I meant Vilanova. Mine disappeared last week
soapy
8:48
UMN under review! As predicted, decisions are gonna come out early December
Minus those random R decisions from UMN yesterday though right? I wonder what happened there. I don’t think I’ve seen a school start the season out with anything but As on here
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