Federal and state securities laws both require that the issuance, sale or transfer of securities be registered unless there is an applicable exemption. The federal requirement appears in Section 5 of the Securities Act of 1933, as amended1 (the "Securities Act") and the New Jersey provision is found in Section 13 of the Uniform Securities Law (1997)2 (the "Uniform Law"). The Securities and Exchange Commission administers the federal law and the New Jersey Bureau of Securities is responsible for enforcing New Jersey’s securities law. For many small and medium sized companies, and for virtually all start-ups, the time and expense involved in registering and going public is prohibitive. Thus, it is vital to many companies that they be able to raise capital and issue securities without registration. This article discusses the principal exemptions from registration under the Securities Act and the Uniform Law for companies raising capital in private placements or offerings.
