How to Meet the Blue Sky Laws
Written as a safeguard for the public regarding the offering and sales of securities, Blue Sky laws regulate the registration of brokerage firms, stock brokers, broker-dealers and all security transactions. These anti-fraud regulations vary widely from state to state, and each state has a Securities Commissioner as well as an individual securities act. Securities include stocks, bonds, notes, profit-sharing agreements, investment contracts or debentures -- any document of future payment, interest, or investment issued by a business or corporation.
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Instructions
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Contact the securities regulation agency in your state. For a comprehensive list of the phone numbers and addresses of all state security agencies, visit the "Guide to State Securities Administrators" at the Sec Law website. For a listing by geographical area, visit the North American Securities Administrators Association and click on "Contact Your Regulator".
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Request information from the securities regulation agency about your state's security act, corresponding regulations and exemptions. Ask the state administrator's staff any pertinent questions regarding adherence to the Blue Sky laws.
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Thoroughly review the statutes, regulations and exemptions before engaging in any securities sales or transactions. Exemptions are provisions outlining instances where businesses or corporations would not need to file a registration statement. In Michigan, for example, there are "Private Placement" exemptions for non-public companies who wish to sell a limited amount of securities.
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Research the federal regulations. Under the Federal Securities Act of 1933 and the Federal Exchange Act of 1934, the federal government regulates the buying, selling, trading and issuance of securities, as noted by the website State Lawyers. Under federal law, businesses and corporations must register with the Security and Exchange Commission and file various reports for public information.
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Seek legal counsel to guide you through the registration process if you are "going public" with your business. Your attorneys will help you prepare a registration statement that includes information about the company, shareholders, officers, directors and related transactions.
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Tips & Warnings
All information pertaining to securities laws, whether federal or state, is open to interpretation and subject to change.
If you require legal advice or expert assistance, retain the services of a competent securities attorney.
References
Resources
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