Monday, March 05, 2007

CALIFORNIA SECURITIES EXEMPTIONS FOR FILM INVESTORS UNDER CORPORATIONS CODE SECTION 25102(f)

If you are seeking out investors in California to invest in your independent film project, please do not run afoul of the federal and state securities laws. If your investment opportunity is considered a "security," then you must be in compliance and your security must be registered. If you are giving an investor an interest in your film with the right to receive a backend, then that interest will likely be a "security."

Under the law, a security must be registered unless it falls under an exemption to registration. Registration can be a lengthy and detailed process. Fortunately, there are several exemptions wherein the security does not have to be registered. One exemption that I have used for independent films is the exemption under California corporations code 25102(f). This exemption is limited to no more than 35 investors with whom you have a pre-existing business or personal relationship.

This exception should be considered when a filmmaker desires to raise money from investors in California. Please see below for further details.

http://www.corp.ca.gov/LOEN/pdf/25102f.pdf

1 comment:

Marv tha' gooner said...

Question. Did you file form D under rule 504(b)(1) with the Federal SEC?