Sales by an issuer having its principal office in Wisconsin if the aggregate number of persons holding all of the issuer's securities, after the securities to be issued are sold, does not exceed 25, not including persons designated in Wis. Stat. s. 551.202(13)
and Wis. Admin. Code s. DFI-Sec 1.02(8)
Note: No commission or other remuneration may be given for soliciting, except to registered broker-dealers or agents, and no advertising may be published unless it has been permitted by the Division of Securities. Specified institutional and accredited investors need not be counted toward the 25 security-holder limit.
Self-executing. No filing or Consent to Service of Process is necessary to claim this exemption. However, if any advertising is "published or circulated" as defined in Wis. Admin Code s. DFI-Sec 1.02(1)(a) and (b)
in connection with this transaction or the securities underlying this transaction, it must be filed with the division and may not be used unless and until the division has allowed its use. If advertising is filed, a fee of $10 per item, as set forth at Wis. Admin. Code s. DFI-Sec 7.01(4)
must accompany the filing.
Frequently asked questions:
Q: Is there any limit on the number of people the issuer can talk to?
A: No. However, although advertising may be circulated, no advertising may be published or broadcast, nor may any public seminar, as that term is used in Wis. Admin. Code s. DFI-Sec 1.02(1)(a)2
, be held, unless allowed by the division. The number of persons holding the issuer's securities, after the securities to be issued are sold, must not exceed 25.
Q: Will advertising make an issuer ineligible for this exemption?
A: Under certain circumstances. Although advertising may be circulated, no advertising may be published or broadcast, nor may any public seminar, as that term is used in Wis. Admin. Code s. DFI-Sec 1.02(1)(a)2
, be held, unless allowed by the division.
Q: Can the exemption be used for an issuer organized under the laws of a state other than Wisconsin?
A: Yes, if the issuer's principal office is located in Wisconsin.
Q: Is there a limit on the amount of money that can be raised?
A: No. The exemption limitation applies only to the number of persons who may hold the securities of the issuer after the securities to be issued are sold (not more than 25, other than persons designated in Wis. Stat. s. 551.202(13)
and rules thereunder).
Q: When calculating the 25 security holders for purposes of the limitation, must we include security holders of related entities?
Q: When calculating the 25 security holders for purposes of the limitation, must we include non-Wisconsin security holders?
Related Considerations: February, 1984 Wisconsin Securities Bulletin. As a result of language contained in 1983 Wisconsin Act 87 (effective November 17, 1983) that reinstated the "15 security holder" exemption of Wis. Stat. s. 551.23(10)
and adopted a uniform limited offering exemption in Wis. Stat. s. 551.23(19)
, representatives currently licensed for a broker-dealer can, under certain conditions, also acquire licenses to represent issuers intending to effect exempt securities transactions under those sections of the Wisconsin Uniform Securities Law.
Administrative rule in Wis. Admin. Code s. DFI-Sec 2.02(5)(a)
, defines, for purposes of computing the 25 person limit, a "person" holding the issuer's securities to include all joint and common owners and all beneficial owners, including the beneficial owners of any entity holding the issuer's securities that was organized in connection with the sale of the securities. However, any relative or spouse holding securities in joint or common tenancy with a person that shares the same home is not deemed a separate security holder for purposes of counting toward the 25 security-holder limit.
History: Predecessor statute Wis. Stat. s. 551.23(10) adopted January 1, 1970. There is no parallel provision in the Uniform Securities Act of 1956. Amended effective October 1, 1971 to allow advertising to be published if it is permitted by the agency. Exemption repealed and recreated effective November 17, 1983 and amended to delete need for agency to permit "circulation" of advertising. Amended effective October 1, 2002 to increase number of securityholders from 15 to 25. Repealed and recreated January 1, 2009.
Phone: (608) 266-2139