Rule 147

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DEFINITION of 'Rule 147'

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.

INVESTOPEDIA EXPLAINS '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.

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