Rule 147

What is the 'Rule 147'

The Rule 147 is a rule that can be used by a company to raise funds without actually registering with the Securities and Exchange Commission (SEC). This rule usually only applies to small companies that wish to raise a small amount of money without incurring the expensive fees associated with registering with the SEC.

BREAKING DOWN 'Rule 147'

More specifically, this rule applies to Section 3(a)11 of the Securities Act of 1933, or the intrastate offering exemption. To qualify for this exemption, the company must meet requirements such as:

- The company must be incorporated in the state in which it is offering the securities.
- The company must carry out a significant portion of its business in that state, which is defined as at least 80% of its operations.
- The company must only sell the securities to individuals residing in the state of incorporation.

RELATED TERMS
  1. Intrastate Offering

    In the United States, a securities offering that can only be ...
  2. 500 Investor Rule

    A SEC stipulation requiring a company that exceeds 500 individual ...
  3. SEC Form N-5

    A filing with the Securities and Exchange Commission (SEC) required ...
  4. SEC Form 10

    A filing with the Securities and Exchange Commission (SEC), also ...
  5. Shelf Offering

    A Securities and Exchange Commission (SEC) provision that allows ...
  6. SEC Form N-14AE

    A form related to Form N-14, which, in general, is a form used ...
Related Articles
  1. Financial Advisor

    The SEC Fiduciary Rule Explained

    The SEC plans to propose its own set of fiduciary rules next year. These are some of the potential implications for advisors.
  2. Markets

    Understand the SEC Rules on Equity Crowdfunding

    The SEC's adoption of equity crowdfunding rules, initiated under the JOBS Act, enables small investors to invest in companies that show early potential.
  3. Markets

    Understanding Rule 144A

    Rule 144A is an SEC rule that changes the two-year holding period requirement on privately placed securities.
  4. Investing

    How A Company Files With The SEC

    Filing with the SEC is not as complicated as you might thing -- just be meticulous about following the steps.
  5. Markets

    What's the SEC?

    The Securities and Exchange Commission (SEC) is an independent agency of the United States government. The mission of the SEC is to enforce securities laws passed by congress. These laws aim ...
  6. Investing

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  7. Markets

    Understanding the SEC

    The SEC's triple mandate of investor protection, maintenance of orderly markets and facilitation of capital formation makes it a vital player in capital markets.
  8. Trading

    The Uptick Rule Debate

    This rule was deemed ineffective and repealed in 2007, but critics argue it protects the market from bear raids.
  9. ETFs & Mutual Funds

    How To Start a Hedge Fund In the United States

    A general overview of how to start a hedge fund firm in the United States, including complying with state and federal regulations.
  10. ETFs & Mutual Funds

    How Mutual Funds Differ Around The World

    Learn which country has the strictest rules on mutual fund construction and why.
RELATED FAQS
  1. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ... Read Answer >>
  2. How do I know if I am buying unregistered securities or stocks?

    All securities, including stocks, bonds and notes, must be registered with the Securities and Exchange Commission (SEC) before ... Read Answer >>
  3. What is an unregistered security scam?

    Each year, millions of Americans lose money to con artists who convince them to invest in companies through "private offerings" ... Read Answer >>
  4. A corporation, which does virtually all of its business in the state where it has ...

    The correct answer is d) Rule 147 is a rule that allows for intrastate offerings to be exempt from the requirements of full ... Read Answer >>
  5. What are the disclosure requirements for a private placement?

    Learn about the SEC rules for disclosure requirements in private placement offerings, and understand what type of information ... Read Answer >>
  6. What kinds of restrictions does the SEC put on short selling?

    Learn about the rules and regulations on short selling enforced by the U.S. Securities and Exchange Commission, or SEC, including ... Read Answer >>
Trading Center