The JOBS Act was a law passed in 2012 in the United States that eased regulations related to funding small businesses.

Intended to increase American job creation and foster economic growth, the JOBS Act aims to provide easier access to public capital markets and small, growing companies.

Some of the key provisions of the bill include:

- Increase the number of shareholders a company may have (500 “unaccredited” shareholders or 2,000 total shareholders) before being required to register its common stock with the SEC and become a publicly reporting company.

- Provide a new exemption to allow use of Internet “funding portals” registered with the government for Title III crowdfunding.

  • One of the conditions of this exemption is a yearly aggregate limit on the amount each person may invest in offerings of this type, tiered by the person’s net worth or yearly income.

- For Title III crowdfunding offerings, mandate reviewed financial statements for offerings between $100,000 and $500,000, and audits of financial statements for offerings greater than $500,000 (noting maximum offering of $1,000,000).

- Lift the ban on “general solicitation” and advertising in specific kinds of private placements of securities. This allows broader marketing of placements, as long as companies only sell to accredited investors (based on income, net worth or written confirmation from a specified third party).

- Raise the limit for securities offerings exempted under Regulation A from $5 million to $50 million, thereby allowing for larger fundraising efforts under this exemption from registration.

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