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Nonprofit Exemption Authorization

Nonprofit Exemption Authorization

Securities issued by business entities with a not-for-profit form of organization (e.g., a nonprofit corporation) may be exempt from registration based on a self-executing exemption for certain offerings at or below $500,000, or upon the review and approval by the Administrator of a Nonprofit Exemption Authorization as described by MCL 451.2201(g) and Rule 2.1 for offerings exceeding $500,000. Michigan requires that Nonprofit Exemption Authorization filings for offerings that do not qualify for a self-executing exemption and its required documents be submitted through the North American Securities Administrators Association’s (NASAA) electronic filing depository (EFD).

If you have questions on a Registration by Coordination filing, please email LARA-Securities-Product@michigan.gov or call (517) 335-5237.

 

Statute Authority:

Rule Authority:

Key Points

  • Not-for-profit securities offerings under MCL 451.2201(g) that do not qualify for a self-executing exemption must comply with the requirements of Rule 2.1, including the requirements below.
  • A non-refundable filing fee of $250.00 is required.
  • The Administrator shall apply an applicable NASAA Statement of Policy when conducting a merit review of offerings made by nonprofit organizations, including the policy on Church Extension Funds, or the policy on Church Bonds, or another applicable policy as adopted in reference in Rule 3.6.
  • The Issuer’s exemption request must include a completed cross-reference sheet identifying where in the offering materials the terms of the offering can be found to demonstrate compliance with the requirements of an applicable statement of policy. (Rule 2.1(5)).
  • An attestation as described by Rule 2.3 must be filed, indicating that the issuer nor any affiliated party described by Rule 2.3 are not subject to disqualification as described in SEC rule 506(d) of SEC regulation D, 17 C.F.R. §230.506(d), or disqualification as described in SEC rule 262 of Regulation A, 17 C.F.R. §230.262.
  • All sales and advertising literature must be filed with the Administrator prior to use and must comply with the applicable statement of policy, including materials developed after the offering commences.

 

Contact Us:

Department of Licensing and Regulatory Affairs (LARA)
Corporations, Securities & Commercial Licensing Bureau (CSCL)
Securities and Audit Division
Phone: (517) 335-5237
Email: LARA-CSCL-Securities-Audit@michigan.gov