Which companies can raise under Reg CF?

Eligibility starts with the legal entity

Reg CF is available to companies organized under and subject to the laws of a U.S. state, territory, or the District of Columbia. A corporation or an LLC can be eligible. A founder’s citizenship, the location of a customer base, or a U.S. mailing address does not by itself establish issuer eligibility. The entity issuing the security matters. Rule 100(b) sets the eligibility conditions.

For a company with foreign operations or a group of related entities, identify the proposed issuer before preparing a campaign. Explain which entity owns the intellectual property, employs the team, earns revenue, and receives the offering proceeds. An investment in a parent company may give investors different exposure from an investment in its operating subsidiary.

Some companies cannot use the exemption

Companies subject to Exchange Act reporting requirements under Section 13 or Section 15(d) cannot use Reg CF. Investment companies, including entities relying on specified Investment Company Act exclusions under Sections 3(b) or 3(c), are also ineligible under Rule 100. A business without a specific business plan cannot use the exemption, nor can a company whose plan is to merge with or acquire an unidentified company. See Rule 100(b)(2), (3), and (6).

This deserves attention if your proposed business primarily pools money to invest in securities or acquire a target you have not selected. Calling the entity a startup, holding company, or community vehicle does not resolve its status. A compliant crowdfunding vehicle has a narrow structure and purpose. It is not a general exception for investment funds.

Prior Reg CF reporting affects a new offering

If your company previously sold Reg CF securities, check its annual reporting history before planning another round. An issuer that failed to file and provide required annual reports during the two years before its new offering statement is ineligible until it cures the required reports. Rule 100 expressly allows a delinquent issuer to become eligible again once it files and provides the reports required for that period. Read Rule 100(b)(5) and its instruction.

First confirm whether a report was required. Reporting obligations can end when a permitted condition applies and the issuer files the required termination notice. Do not assume that an old campaign’s closing, or an intermediary no longer hosting its page, ended the obligation. Keep the filings and supporting records together so the next offering team can establish the history.

Disqualification checks cover people around the offering

Reg CF includes “bad actor” disqualification rules for specified convictions, orders, regulatory sanctions, and other events. Covered persons include the issuer, predecessors, affiliated issuers, directors, officers, managing members, certain promoters and compensated solicitors, and beneficial owners of at least 20% of outstanding voting equity, measured by voting power. The exact covered-person categories, timing, and exceptions require attention. Rule 503 provides the full test.

Gather complete names, roles, ownership information, and relevant disciplinary history early. A percentage of economic ownership does not always equal the same percentage of voting power. A founder who changed titles can still occupy a covered role.

The rules require a factual inquiry appropriate to the circumstances. Some events require disclosure even when they do not disqualify the offering. Present a possible issue to counsel and the portal before spending money on launch materials. An omitted issue can become harder to address once documents circulate.

Legal eligibility and practical readiness are different

An eligible issuer still needs a workable offering. Reg CF does not impose a universal minimum revenue, profitability, or operating-history requirement. Your business must nevertheless provide the required information and financial statements, describe its risks, and explain its plan accurately. The intermediary also has obligations to evaluate access to its platform and reduce fraud risk. The SEC’s issuer guidance describes these requirements.

A newly formed company might have a concrete plan and usable records. A longer-established company might need substantial work to reconcile ownership or financial information. Neither outcome follows from age alone. Readiness depends on the actual records, proposed terms, and people available to support the offering.

Bring a clear company picture to Issuance Express

For an initial portal discussion, gather your legal entity details, ownership summary, prior fundraising history, proposed use of proceeds, and current financial records. Include controlled entities, companies under common control, and predecessors because they can affect Reg CF aggregation and disclosure requirements.

Issuance Express reviews portal fit and coordinates the information and partners needed for offering preparation. We manage Form C production and filing, while your company remains responsible for accurate information and counsel provides legal advice. Use the financial statements guide to anticipate accounting work, or submit your company information to begin a fit discussion. An application starts that review. It does not establish eligibility or guarantee acceptance.