When a company raises capital by selling securities under Regulation D of the Securities Act of 1933, it must file a Form D with the Securities and Exchange Commission (SEC). The Form D filing serves as a notice that informs the SEC of the securities offering and is required to comply with federal regulations. Form D allows companies to raise capital without registering their securities so long as they qualify for an exemption under Regulation D.
Although filing a Form D makes certain details about a company public, the disclosure is relatively limited. The required information includes:
- Names and addresses of your company’s executive officers and directors.
- Type and amount of securities being offered.
- The total amount of money the company is aiming to raise, the amount sold, and the gross proceeds paid to the company’s directors, officers, and promoters.
- Identity of brokers, dealers, and finders used to solicit investors in the offering and the amount of sales commissions and finders’ fees paid to those persons.
Form D does not require a company to disclose its valuation, cap table, or the names of its investors. Additionally, a Form D filing does not impose any ongoing reporting, compliance, or corporate governance obligations, aside from the possibility of needing to amend the filing in the future.
Filing a Form D is a legal requirement if a company is selling securities under Regulation D and must be filed electronically through the SEC’s EDGAR system within 15 days of the first sale of securities. While some companies may choose to delay filing to control the release of sensitive information, such delays can lead to penalties and may jeopardize a company’s ability to rely on Regulation D for future funding rounds. To avoid any legal or strategic missteps, it’s essential to consult your legal team to ensure your filing strategy complies with securities regulations while supporting your business goals.