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ARTICLE · 10 APRIL 2012

Sweeping Changes To Securities Laws Affecting Small Company Capital Formation Adopted

Loeb & Loeb LLP
Loeb & Loeb LLP
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Loeb & Loeb LLP

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The Jumpstart Our Business Startups (JOBS) Act, enacted April 5, 2012, relieves startup businesses of significant restraints and costs of raising capital imposed by securities laws.

United StatesFinance and Banking
Corporate Practice Group
Corporate Practice Group

The Jumpstart Our Business Startups (JOBS) Act, enacted April 5, 2012, relieves startup businesses of significant restraints and costs of raising capital imposed by securities laws.

General Solicitations

Current Securities and Exchange Commission rules prohibit companies from using any general solicitation (for example, through advertisements) to sell unregistered securities. The JOBS Act requires the SEC, within 90 days of the law's enactment, to amend Rules 506 and 144A to permit unregistered sales to accredited investors and qualified institutional buyers, through general solicitation or general advertising. Securities sold pursuant to the amended rules will continue to constitute restricted securities.

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