North Carolina crowdfunding almost became legal early last year. However internal politics stalled the bill which is now reintroduced with new legislation that may allow an unlimited amount of capital to raised for private businesses.
House Bill 63 “The North Carolina Intrastate Private Capital Act” is sponsored by Representative Chris Millis. The bill is the second North Carolina crowdfunding bill introduced in the General Assembly this year. The other bill, House Bill 14 is titled “The Jump Start Our Business Start-Ups Act and To Enact The New Markets Jobs Act of 2015″.
Both bills intend to exempt North Carolina businesses and North Carolina investors from SEC federal securities rules. The new bill would let North Carolina businesses to raise capital from investors who are residents in North Carolina.
Chris MillisChris Millis’ legislation is designed to allow private North Carolina companies to raise an unlimited amount of capital from an unlimited number of accredited investors, consistent with current Federal legislation on a Reg D Rule 506 (c) offering.
Under the points of the new legislation, a business based in North Carolina would be able to raise an unlimited amount of capital from high net worth (accredited) investors.
For Non-accredited investors, the maximum investment is limited to $5,000 in a single business per year, but they could invest in an unlimited number of businesses.
The major issue slowing legislation for crowdfunding under Title III of the Jobs Act at the SEC is dealing with the issue of insulating non-accredited investors from fraudulent activity. Many lawmakers do not think the SEC is ever going to act on this issue.
Private North Carolina businesses, especially small manufacturing firms, need growth capital, and North Carolina crowdfunding can help take control of our the state’s economic direction and move forward to fill gaps with the proposed crowdfunding legislation by Representative Millis.