Form 1-A is a legal document that outlines the terms of an investment offering when a company is raising capital from both accredited and non-accredited investors using Regulation Crowdfunding; specifically Regulation A (Reg A). Form 1-A is used to disclose to prospective investors key information in an attempt to prevent fraud in the sale of the securities that are offered by issuers.
Issuers have two options when filing Form 1-A:
- Tier 1: Offerings of securities up to $20 million in a 12-month period
- Tier 2: Offerings of securities up to $75 million in a 12-month period.
Both Tier 1 and 2 issuers are required to file Form 1-A with the SEC. Click here to learn more about the difference between Tier 1 and Tier 2 Regulation A investment offerings.
Unlike both Reg CF and Reg D, Regulation A requires a formal review and qualification from the SEC before the Issuer begins to sell securities. This process varies and can take anywhere from a few weeks to a few months; sometimes longer for companies in industries of specific interest or concern to the SEC (i.e. Crypto and Blockchain companies).
Form 1-A is made up of three parts and must be prepared by all companies seeking exemption under Regulation A:
- Part I – Notification
- Parts II – Information Required in the Form 1-A Offering Circular
- Part III – Exhibits and Signatures
Form 1-A is the primary legal document filed with the Securities Exchange Commission (SEC) when a company is using the Regulation A format to raise capital.
A blank copy of Form 1-A can be found at the SEC’s website by clicking here: View Form 1-A on the SEC’s website
About the Author: Ryan Frank
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CalTier Realty
