An Act To Increase Funding for Start-ups
Maine Legislature, Session 126, LD 1512
Committee Amendment CA_A_S382 (Senate)
Amends: 32 MRSA §16304

COMMITTEE AMENDMENT" A" to S.P. 568, L.D. 1512, Bill, "An Act To 
Increase Funding for Start-ups" 
Amend the bill by striking out everything after the title and before the summary and 
inserting the following: 
'Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, this legislation promotes and encourages the growth of Maine small 
businesses by facilitating the ability of a business to raise capital by selling small amounts 
of securities to a wider pool of small investors with fewer restrictions; and 
Whereas, the enactment of this legislation will provide immediate access to capital 
and streamline regulations for Maine small businesses without diminishing the regulatory 
protections for investors; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 32 MRSA §16304, sub-§6-A is enacted to read: 
6-A. Short-form registration statement. The administrator may adopt by rule a 
form to be used as a short-form registration statement for securities being registered 
under this section and sold in offerings in which: 
A. The issuer of the security is a corporation or other entity having its principal place 
of business in this State and registered with the Secretary of State as an entity formed 
under the laws of this State or authorized to transact business within this State; 
B. The aggregate amount of securities sold to all investors by the issuer within any 
12-month period is not more than $1,000,000; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A "to S.P. 568, L.D. 1512 
C. The aggregate amount of securities sold to any investor by the issuer, including 
any amount sold during the 12-month period preceding the date of the transaction, 
does not exceed $5,000, or a greater amount as the administrator may provide by rule 
or order, unless the investor is an accredited investor as defined in 17 Code of Federal 
Regulations, Section 230.501 (2013); 
D. 
The offering meets the requirements of the federal exemption for limited 
offerings and sales of securities not exceeding $1,000,000 in 17 Code of Federal 
Regulations, Section 230.504 (2013 ); 
E. The issuer files with the administrator, provides to investors and makes available 
to potential investors an offering document setting forth the following: 
(1) The name, legal status, physical address and website address of the issuer; 
(2) The names of the directors, officers and any persons occupying a similar 
status or performing similar functions; 
(3) The name of each person holding more than 20% of the shares of the issuer; 
(4) A description of the business of the issuer and the anticipated business plan 
of the issuer; 
(5) A description of the financial condition of the issuer, including the following: 
(a) For offerings that, together with all other offerings of the issuer within 
the preceding 12-month period, have, in the aggregate, offering amounts of 
$100,000 or less: 
en 
The income tax returns filed by the issuer for the most recently 
completed year, if any; and 
(m 
The financial statements of the issuer certified by the principal 
executive officer of the issuer to be true and complete in all material 
respects; 
(b) For offerings that, together with all other offerings of the issuer within 
the preceding 12-month period, have, in the aggregate, offering amounts of 
more than $100,000 but not more than $500,000, financial statements 
reviewed by a public accountant who is independent of the issuer, using 
professional standards and procedures for the review or standards and 
procedures established by the administrator by rule; or 
(c) For offerings that, together with all other offerings of the issuer within 
the preceding 12-month period, have, in the aggregate, offering amounts of 
more than $500,000, audited financial statements; 
(6) A description of the stated purpose and intended use of the proceeds of the 
offering sought by the issuer; 
(7) The offering amount, the deadline to reach the offering amount and regular 
updates regarding the progress of the issuer in meeting the offering amount; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A "to S.P. 568, L.D. 1512 
(8) 
The price to the public of the securities or, if the price has not been 
detennined, the method for detennining the price as long as prior to the sale each 
investor is provided in writing the final price and all required disclosures with a 
reasonable opportunity to rescind the commitment to purchase the securities; and 
(9) A description of the ownership and capital structure of the issuer, including: 
(a) The terms of the securities being offered and all other classes of security 
of the issuer, including how those terms may be modified, and a summary of 
the differences between the classes of securities, including how the rights of 
the securities being offered may be materially limited, diluted or qualified by 
the rights of any other class of security of the issuer; 
(b) A description of how the exercise of the rights held by the principal 
shareholders of the issuer could negatively impact the purchasers of the 
securities being offered; 
(c) The name and ownership level of each existing shareholder who owns 
more than 20% of any class of the securities of the issuer; 
Cd) 
How the securities being offered are being valued and examples of 
methods for how those securities may be valued by the issuer in the future, 
including during subsequent corporate actions; and 
Ce) The risks to purchasers of the securities relating to minority ownership in 
the issuer and the risks associated with corporate actions, including additional 
issuances of shares, a sale of the issuer or of assets of the issuer and 
transactions with related parties; and 
F. The issuer sets aside in a separate bank account all funds raised as part of the 
offering to be held until such time as the minimum offering amount is reached. If the 
minimum offering amount is not met within one year of the effective date of the 
offering, the issuer must return all funds to investors. 
An issuer who elects to use a short-fonn registration statement pursuant to this subsection 
must comply with other requirements set forth by rule adopted or order issued under this 
chapter. 
Notwithstanding section 16304, subsection 3, the administrator may provide by rule that a 
short-fonn registration statement filed under this subsection is immediately effective 
upon filing or becomes effective within some other stated period after filing, 
conditionally or otherwise. 
Emergency clause. 
In view of the emergency cited III the preamble, this 
legislation takes effect when approved.' 
SUMMARY 
This amendment replaces the bill and adds an emergency preamble and emergency 
clause. Like the bill, the purpose of the amendment is to promote and encourage the 
growth of Maine small businesses by facilitating the ability of a business to raise capital 
COMMITTEE AMENDMENT 
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COMMITIEE AMENDMENT" A" to S.P. 568, L.D. 1512 
by selling small amounts of securities to a wider pool of small investors with fewer 
restrictions. 
This amendment provides for a streamlined registration process and simplified 
registration statement if the issuer and the offering meet certain conditions, including: 
1. The issuer of the security is a business entity formed and registered under Maine 
law with its principal place of business in Maine; 
2. The dollar amount of the securities sold by an issuer during any 12-month period 
does not exceed $1,000,000; 
3. The dollar amount of securities sold to any single investor does not exceed $5,000 
unless the investor is an accredited investor as defined in regulations adopted by the 
federal Securities and Exchange Commission; 
4. The offering meets the requirements for a federal exemption from registration for 
small offerings as set forth in regulations adopted by the federal Securities and Exchange 
Commission; 
5. The issuer files with the administrator and provides to investors and prospective 
investors an offering document meeting the requirements of state law and any rules 
adopted or orders issued by the administrator; and 
6. The issuer sets aside in a separate bank account funds received from investors 
until such time as the minimum offering amount is reached. If the minimum offering 
amount is not met within one year of the effective date of the offering, the issuer must 
return all funds to investors. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 01128/14 hac:. 
LD 1512 
LR 1882(02) 
An Act To Increase Funding for Start-ups 
Fiscal Note for Bill as Amended by Committee Amendment '~' (5 -38'~) 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor revenue increase - General Fund 
Minor cost increase - Other Special Revenue Funds 
Any additional revenue collected and costs incurred by the Office of Securities in the Department of Professional and 
Financial Regulation are expected to be minor and the costs can be absorbed within existing budgeted resources. 
LR1882(02) - Fiscal Note - Page 1 of 1