Legal Question in Securities Law in California

Re: Investment Offering

This is a potentially very sensitive and liability-laden issue that any securities lawyer would use great caution in answering and would give a qualified answer unless fully researched.

So, let me give you my cautious and highly qualified unresearched answer:

In broad, general terms, a license is not required to offer securities as the original issuer, or its employee. A license is required if you are a broker, dealer, underwriter or an agent or employee of a broker, underwriter or dealer. Whether you need a license or not depends on your occupation (full or part time) as a broker or dealer more than your relationship to the particular transaction. Thus, if you act part-time as a securities dealer or the representative of one, you need a license even if you also happen to be hired on as an employee of the issuer.

In addition to a securities dealer license, a person might also (or instead) need to be licensed as an investment advisor, if offering investment advice could be part of the activity.

Finally, perhaps the most generally useful advice I can give is that whether the individual needs to be licensed or registered or not, the person doing the offering, and the issuer of the securities ("Investment opportunities" will almost invariably be securities under the sweeping definition in Federal law), need to be fully compliant with the laws regulating the sale of securities. Whether or not the individual is exempt from licensing, no one is exempt from civil and criminal penalties for illegal securities offerings. It has been said that there are three kinds of securities offerings: registered, exempt and illegal. Since you probably won't be registering your securities with the SEC and state authorities, you need to be absolutely sure you are operating within an existing and fully applicable exemption from registration, e.g. Regulation D or one of several others.

I advise taking your business idea to a securities lawyer and getting hands-on advice. It's a very risky area. Compliance with the regulations is not easy and the penalties are harsh.