Not waiting for the stalled Jobs Act legislation, Alabamians now have a new method for companies to raise money for working capital.
Gov. Robert Bentley April 8, 2015 signed legislation that was sponsored by Republican Sen. Arthur Orr of Decatur and supported by the Alabama Securities Commission.
The new law allows a business in Alabama to use online crowdfunding to find investors who live within the state. Alabama crowdfunding is limited to raising $1 million per year, and it is restricted to Alabama businesses and investors because of federal regulations. The investments are capped at $5,000 for investors, to limit risk. The process comes with less cost and less regulation than larger business investments, but the Securities Commission still plays a role.
The crowdfunded capital is still under the regulatory authority of the ARC, but with much less paperwork and expense than when funding through traditional investors.
The groundwork for Alabama crowdfunding was laid in 2012, when the U.S. Congress passed the Jobs Act. Title III of this bill lets states begin to write their own regulations for crowdfunding to raise business capital. Alabama has seen an surge in business optimism, driven in part by assessing more certainty in the Alabama crowdfunding market than they did in the past year.
Review the current Alabama Crowdfunding Exemption:
Here are just a few features for instrastate equity crowdfunding included in the CrowdForce platform software:
• State residency self-verification
• Driver’s license upload for verification
• Setting funding limits for non-accredited investors
• Allowing accredited investor participation
• Complete and simple document signing and management
• Integrated ACH payments
• Plug in your state escrow account
• Plugin in your broker services for accredited investments
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