Dallas, TX asked in Securities Law for Texas

Q: Can non-accredited investor, invest in a private fund registered under Rule 506(c) offering by forming an LLC?

SEC rule 506(c) mandates only accredited investors are eligible to contribute to the funds. So can non-accredited investor form an LLC to obtain accredited status? If yes, what are the terms and conditions that one should be aware off?

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1 Lawyer Answer
Robert W. Pearce
Robert W. Pearce
PREMIUM
Answered
  • Securities Law Lawyer
  • Boca Raton, FL

A: Either you are accredited or not! The issuer is not going to risk losing a safe-harbor exemption for registration to take on an unaccredited investor. And they it tells you otherwise, watch out!!

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