Reg D Rule 506(b) and 506(c)

Rule 506 of Regulation D – Unlimited Private Offerings

What is Rule 506?

Rule 506 is the most widely used Regulation D exemption, allowing companies to raise unlimited capital from accredited investors, with two sub-rules:

Rule 506(b):

• No general solicitation

• Up to 35 non-accredited but sophisticated investors

• Requires delivery of disclosure documents

• Used by funds, real estate deals, and traditional private placements

Rule 506(c):

• General solicitation and advertising allowed

• Accredited investors only

• Issuer must verify accreditation status

Key Benefits:

• Raise unlimited capital

• Avoid SEC registration

• Access broad investor pools (especially under 506(c))

Form D and Blue Sky filings are required.