Form D and SEC Reporting Requirements for Rule 506

Rule 506 of Reg D provides a safe harbor within the Securities and Exchange Act of 1933.  Companies can raise money through a private placement offering without having to formerly register with the SEC and provide the disclosure documents required for issuing a public offering.  Companies typically select Rule 506, rather than Rule 505, if they want to raise more than $5 million.  You can raise an unlimited amount of money with Rule 506.

The SEC reporting requirements when using Reg D are often open for interpretation.  For example a company needs to provide financial disclosures but, as long as your funds are raised from accredited investors, the company decides what disclosures to give.  This applies to all company information.  As long as a company is making best efforts, and not attempting to commit fraud, the company itself can determine what disclosures to make.

These loose guidelines lead many companies to believe that they don’t need to do anything with the SEC as long as they are using Rule 505 or Rule 506.  That is actually not the case.

Companies selling restricted securities under Rule 506 of Reg D need to follow the SEC reporting requirements:

  • EDGAR.  This is the electronic database the SEC uses for maintaining information on companies.  Before you can upload or report on anything you need to gain access to this system.  Allow for a couple of days for processing.
  • Company Information.  You will need to upload your company information into EDGAR.  Have all of your data handy and determine who will be the company representative ahead of time.  Who do you want the SEC or other investors to call with questions?  This shouldn’t be the company secretary but someone familiar with the offering.
  • Form D.  According to SEC regulations a company must file a “Form D” after they sell their first security.  As of 2009 this is all done electronically through the EDGAR system. Form D contains the names and addresses of the company owners and people promoting the offering.  While only a brief notice it is an important requirement.

Companies that are issuing their first private placement memorandum should carefully pay attention to the SEC guidelines for Rule 505 and Rule 506 in order to ensure that they remain within the safe harbor provisions of Reg D.  Filing Form D as part of the SEC requirements is not an overly difficult task but it will take some time to get registered in the system.  Once your PPM is done register with EDGAR.  The process can take a few days and it is important to register early so that when you sell your first security you can easily complete and upload Form D.  Once you have finished the process on EDGAR investors will be able to view your Form D online.  This can also help to solidify your offering as it shows investors that you are willing to openly communicate and follow aspects of the regulation that many companies are unaware of.

For more information on SEC reporting requirements you can click here.  At you can gain access to the leads you need to raise money through your private placement offering.

For more information please visit our mother site at