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What Are the Offering Requirements for Reg CF? A Complete Guide for Issuers

To conduct a Reg CF offering, a company must file a Form C with the SEC through a registered funding portal or broker-dealer, meet the SEC's issuer eligibility rules, prepare disclosures covering the business, its financials, and the offering's terms, and comply with financial statement and ongoing reporting requirements that scale with the size of the raise. Unlike Reg A+, Reg CF does not require SEC staff to review and “qualify” the filing before the company can accept money.

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Reg CF lets companies raise up to $5 million in a 12-month period from both accredited and non-accredited investors. See our guide on who can invest in Reg CF for the investor-side rules (link live once that page is published), this post covers what issuers themselves are required to do.

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Core Reg CF Offering Requirements

Issuer Eligibility

Must be a U.S. company, not already an SEC reporting company, not certain types of investment company, and not subject to Reg CF's bad actor disqualification.

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Form C & SEC Filing

Issuers file Form C through EDGAR and the funding portal. There's no SEC “qualification” step like Reg A+, the offering can proceed once Form C is filed.

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Financial Statements

Requirements scale with raise size: officer-certified statements up to $124,000, reviewed statements up to $618,000, and audited statements above that, or above $1,235,000 for first-time issuers.

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Ongoing Reporting

Issuers file an annual report (Form C-AR) within 120 days of fiscal year-end, plus progress updates (Form C-U) at 50% and 100% of the funding target.

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Who is eligible to use Reg CF

Not every company can use Reg CF. To be eligible, a company generally must:

• Be organized in, and have its principal place of business in, the United States
• Not already be an Exchange Act reporting company
• Not be certain types of investment company under the Investment Company Act
• Not be disqualified under Regulation Crowdfunding's bad actor rules
• Not have failed to comply with Reg CF's annual reporting requirements during the two years before filing
• Have a specific business plan that isn't simply to merge with or acquire an unidentified company

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See the full requirements on the SEC's Regulation Crowdfunding guidance for issuers.

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Filing Form C, no SEC qualification required

Every Reg CF offering starts with a Form C, an offering statement filed electronically through the SEC's EDGAR system and with the funding portal or broker-dealer running the offering. Unlike a Reg A+ Form 1-A, a Form C doesn't need to be reviewed and qualified by SEC staff before the company can accept money. The offering can proceed once Form C is filed.

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Before filing, companies can “test the waters” under Rule 206, gauging public interest without accepting money, as long as materials make clear that no money is being solicited yet and no offer can be accepted until the exemption's requirements are met.

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Once an offering is live, issuers have to keep investors and the SEC updated: a Form C-U progress update is required within five business days of reaching 50% and 100% of the target offering amount, plus a final Form C-U if the company accepts investments above its target. Material changes require an amendment on Form C/A, which gives investors five business days to reconfirm their commitment, or it's automatically cancelled.

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Financial statement requirements by raise size

The SEC scales financial statement requirements to how much a company is raising in the 12 months before the offering:

• $124,000 or less: financial statements and relevant federal tax return information certified by the principal executive officer, or reviewed/audited statements instead, if the company already has them
• More than $124,000 up to $618,000: financial statements reviewed by an independent public accountant, or audited statements, if already available
• More than $618,000 up to $1,235,000, for first-time Reg CF issuers: reviewed financial statements, unless audited ones are already available
• More than $1,235,000 for first-time issuers, or any amount above $618,000 for issuers that have raised under Reg CF before: audited financial statements

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What has to be disclosed in Form C

Form C's instructions require issuers to disclose:

• Bios of officers, directors, and owners of 20% or more of the company
• A description of the business and the intended use of proceeds
• The price of the securities, or the method for determining it, the target offering amount, the deadline to reach it, and whether the company will accept investments above that target
• Certain related-party transactions
• A discussion of the company's financial condition, alongside the financial statements described above

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Advertising and marketing restrictions

Once Form C is filed, a company can't advertise the offering everywhere. Off-platform communications that direct investors to the funding portal are limited to no more than: a statement that the offering is being conducted under Securities Act Section 4(a)(6), naming and linking to the intermediary; the offering's terms, meaning the amount and type of securities offered, their price, the offering's closing date, the planned use of proceeds, and the company's progress toward its funding target; and factual information about the company's legal identity and location (name, address, phone number, website, a representative's email, and a brief description of the business).

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Anything beyond that list, expanded pitches, testimonials, broader marketing claims, has to stay on the funding portal itself, where the issuer must identify itself as the issuer in every communication. Companies can pay others to promote the offering through the portal's own channels, as long as the promoter clearly discloses the compensation every time.

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Federal preemption: no state-by-state registration

Securities sold under Reg CF are treated as covered securities under federal law, so companies don't need to separately register the offering in every state where investors are located, regardless of how much they're raising. States retain the ability to require notice filings and fees and keep their own anti-fraud enforcement authority, but a compliant Reg CF offering doesn't face the state-by-state qualification process that applies to some other offering types.

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Resale restrictions

Securities purchased in a Reg CF offering generally can't be resold for one year. Exceptions include transferring them back to the company, to an accredited investor, as part of an SEC-registered offering, or to a family member (including through a trust), or in connection with a death or divorce.

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Bad actor disqualification

An offering is disqualified if the company or certain “covered persons”, including its directors, officers, general partners, anyone owning 20% or more of its voting stock, connected promoters, and paid solicitors, have had a disqualifying event, such as a securities fraud conviction, certain court injunctions, or specific SEC or state regulatory orders, generally within the preceding five to ten years. If the company didn't know and couldn't reasonably have known about a covered person's disqualifying history, a narrow exception applies, and the SEC can grant a waiver for good cause.

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Ongoing reporting obligations after the offering

Once an offering closes, the company must file an annual report on Form C-AR within 120 days of its fiscal year-end, filed on EDGAR and posted on the company's own website. That obligation continues until one of the following happens:

• The company becomes required to file reports under Exchange Act Section 13(a) or 15(d)
• The company has filed at least one annual report and has fewer than 300 holders of record
• The company has filed at least three annual reports and has total assets of $10 million or less
• The company, or another party, repurchases all the securities issued under Reg CF, including full repayment of debt securities or complete redemption of redeemable securities
• The company liquidates or dissolves in accordance with state law

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A company that stops filing annual reports under one of these conditions has to file a notice on Form C-TR.

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Getting started

Reg CF's requirements are real, but they're built to be manageable for early-stage companies without the cost of a fully SEC-qualified offering. See DealMaker's offering types to compare Reg CF against Reg A+ and Reg D, or learn why founders choose DealMaker to run a compliant Reg CF offering end to end.

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