Rule 506 of Regulation D provides two exemptions from registration with the SEC for companies offering and selling securities. The company can broadly solicit and generally advertise the offering if: (1) the investors in the offering are all accredited investors; (2) the issuer takes reasonable steps to verify that the investors are accredited investors by reviewing financial statements pursuant to several non-exclusive methods (income, net worth, third-party verification), or by reviewing the investors accreditation status pursuant to a principles based (facts and circumstances) approach. See 506(c) Offering.
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