§ 51:705 — Registration of securities; when and how required; delivery of prospectus

Louisiana § 51:705

• Jurisdiction: Louisiana
• Title 51: Trade and Commerce

Text

§705. Registration of securities; when and how required; delivery of prospectus
A. Generally. It shall be unlawful for any person to offer for sale or sell any
securities in this state unless any of the following conditions are met:
(1) They are subject to an effective registration statement under this Part.
(2) The security or transaction is exempt under R.S. 51:708 or 709.
(3) The securities are federal covered securities pursuant to R.S. 51:702.
B. Registration by qualification. (1) Any security may be registered by qualification
under the terms and conditions provided in this Subsection by filing a registration statement
which shall be signed by the issuer, its chief executive officer, its principal financial officer,
its comptroller or principal accounting officer, and the majority of its board of directors or
persons performing similar functions, or, if there is no board of directors or persons
performing similar functions, by the majority of the persons or board having the power of
management of the issuer. A registration statement shall be deemed effective only as to the
securities specified therein as proposed to be offered.
(2) The registration statement shall contain the information specified in Paragraph
(C)(1) of this Section and shall be accompanied by the documents specified in Paragraph
(C)(2) of this Section except that the commissioner may by rules or regulations provide that
any such information or document, other than the requirements with respect to financial
statements provided in Paragraph (C)(1) of this Section, need not be included with respect
to any class of insurers or securities if he finds that the requirement of such information or
document is inapplicable to such class and that disclosure fully adequate for the protection
of investors is otherwise required to be included within the registration statement. If any
accountant, attorney, engineer, or appraiser or any person whose profession gives authority
to a statement made by him is named in the registration statement as having prepared an
opinion referred to in the registration statement or as having certified any part of the
registration statement or is named as having prepared or certified a report of valuation for use
in connection with the registration statement, the written consent of such person to the
references to him in the registration statement shall be filed with the commissioner prior to
the effectiveness of the registration statement. Any such registration statement shall contain
such other information and be accompanied by such other documents as the commissioner
may by rules or regulations require as being necessary or appropriate in the public interest
or for the protection of investors. Each registration statement which is filed under this
Subsection shall be accompanied by the payment of the filing fee prescribed in R.S.
51:706(A) and, if required under R.S. 51:706(B), a consent to service of process meeting the
requirements of R.S. 51:718.
(3) A prospectus which is part of a registration statement effective under this
Subsection and which contains the information specified in Paragraph (C)(1) of this Section,
except to the extent modified by rules or regulations promulgated by the commissioner as
provided in Paragraph (C)(2) of this Section, shall be delivered to any purchaser prior to or
simultaneously with the execution by the purchaser of a written agreement to purchase, the
delivery of a confirmation of sale, or the payment for securities offered by means of such
prospectus, whichever occurs first.
(4) A registration statement under this Subsection becomes effective when the
commissioner so orders.
C. Registration statement. (1) Every registration statement filed under Subsection
B of this Section shall contain the following information:
(a) With respect to the issuer: its name, street address, form of organization and its
telephone number; the state or foreign jurisdiction and date of its organization; the general
character and location of its business; a description of its physical properties and equipment;
and a statement of the general competitive and regulatory conditions in the industry or
business in which it is or will be engaged.
(b) With respect to every director and officer of the issuer, or person occupying a
similar status or performing similar functions: his name, address, and principal occupation
for the past five years; any criminal convictions or pending criminal proceedings involving
the sale of securities of any such person or any disciplinary action taken or pending against
any such person by the Securities and Exchange Commission, the Financial Industry
Regulatory Authority, the commissioner, or any state securities regulatory authority; the
amount of securities of the issuer beneficially owned by him as of a specified date within
thirty days of the filing of the registration statement; and a statement, including price
information, of all transactions by such person in securities of the issuer beneficially owned
by him during the two years preceding such date; the amount of the securities covered by the
registration statement to which he has indicated his intention to subscribe; and with respect
to each such person and any affiliate of such person or affiliate of a person specified in
Subparagraph (e) and (f) of this Paragraph, a description of any material interest in any
material transaction with the issuer or any significant subsidiary effected within the past three
years or proposed to be effected.
(c) With respect to any person named as serving or as having agreed to serve as an
advisory director of the issuer or in a similar capacity: a description of the exact relationship
that will exist between the issuer and such person and the compensation paid or to be paid
to such person to serve in such capacity.
(d) The remuneration paid during the past twelve months and estimated to be paid
during the next twelve months, directly or indirectly, by the issuer, together with all
predecessors, subsidiaries, and affiliates, to each of the three highest paid officers or directors
of the issuer and to all those persons covered by Subparagraph (C)(1)(b) of this Section in
the aggregate.
(e) With respect to any person owning of record, or beneficially, if known, ten
percent or more of the outstanding shares of any class of equity security of the issuer: the
information specified in Subparagraph (C)(1)(b) of this Section other than information with
respect to his occupation.
(f) With respect to every promoter if the issuer was organized within the past three
years: the information specified in Subparagraph (C)(1)(b) of this Section, any amount paid
to him within that period or intended to be paid to him, and the consideration for any such
payment.
(g) With respect to any person, other than an issuer, on whose behalf any part of the
offering is to be made: his name and address, the amount of securities of the issuer
beneficially owned by him as of the date of the filing of the registration statement, and a
description of any material interest in any material transaction with the issuer or any
significant subsidiary effected within the past three years or proposed to be effected.
(h) The capitalization, including short-term and long-term debt, both as of the latest
practicable date within ninety days and as adjusted to give effect to the proposed offering,
of the issuer and all subsidiaries whose financial statements are filed with the registration
statement on either a consolidated or an individual basis, including a description of each
security outstanding or being registered or otherwise offered, and a statement of the amount
and kind of consideration, whether in the form of cash, physical assets, services, patents,
good will, or anything else, for which the issuer or any subsidiary has issued any of its
securities within the past two years or is obligated to issue any of its securities.
(i) The kind and amount of securities to be offered; the proposed offering price or
the method by which it is to be computed; any variation therefrom at which any portion of
the offering is to be made to any person or class of persons other than the underwriters, with
a specification of any such person or class; the basis upon which the offering is to be made
if otherwise than for cash; the estimated aggregate underwriting and selling discounts or
commissions and finders' fees, including separately, cash, securities, contracts, or anything
else of value to accrue to the underwriters or finders in connection with the offering, or, if
the selling discounts or commissions are variable, the basis of determining them and their
maximum and minimum amounts; the estimated aggregate amounts of other selling
expenses, including legal, engineering, printing, and accounting charges; the name and
address of every underwriter and every recipient of a finder's fee; and a description of the
plan of distribution of the securities which are to be offered.
(j) The net estimated cash proceeds to be received by the issuer from the offering
after deducting all estimated expenses of the offering; the purposes for which the proceeds
are to be used by the issuer; the amount proposed to be used for each purpose; the proposed
order of priority in which the proceeds will be used for the purposes stated in the event the
offering is not pursuant to an underwriting agreement under which no securities will be sold
unless all securities to be offered are sold; the amounts of any funds to be raised from other
sources to achieve the purposes stated; and the nature of the sources of any such funds.
(k) In any case where the securities to be offered are to be sold in any manner except
an underwriting under which no securities will be sold unless all securities to be offered are
sold, and where the issuer of such securities:
(i) Has not had any substantial gross revenues from the sale of products or services
or any substantial net income from any source for any fiscal year ended during the past three
years; and
(ii) Has not succeeded and does not intend to succeed to any business which has had
any substantial gross revenues from the sale of products or services, or any substantial net
income from any source, for any fiscal year ended during the past three years, the minimum
amount of funds to be derived from the offering after expenses of the offering which the
issuer reasonably believes to be necessary to enable the issuer to operate the business it
proposes to conduct.
(l) A description of any stock options or other security options outstanding, or to be
created in connection with the offering, together with the amount of any such options held
or to be held by every person required to be named in Paragraph (C)(1) of this Section and
by any person who holds or will hold, after giving effect to the proposed offering, ten percent
or more of the securities subject to such options.
(m) The dates of, parties to, and general description concisely stated of every
management or other material contract made or to be made otherwise than in the ordinary
course of business if it is to be performed in whole or in part at or after the filing of the
registration statement.
(n) A description of any pending litigation or proceeding to which the issuer or any
significant subsidiary is a party and which could materially adversely affect its business or
assets, including any such litigation or proceeding known to be contemplated by
governmental authorities.
(o)(i) The following financial statements:
(aa) A balance sheet of the issuer or a consolidated balance sheet of the issuer and
its subsidiaries prepared in accordance with generally accepted accounting principles as of
a date within ninety days prior to the filing of the registration statement and, if such balance
sheet is not certified, also a certified balance sheet of the issuer or a certified consolidated
balance sheet of the issuer and its subsidiaries prepared in accordance with generally
accepted accounting principles as of a date not more than one year prior to the date of filing
unless the last fiscal year of the issuer has ended within ninety days prior to the date of filing,
in which case such certified balance sheet may be as of the end of the fiscal year preceding
such last fiscal year.
(bb) A profit and loss statement, analysis of surplus, and a statement of source and
application of funds of the issuer or consolidated statements of the issuer and its subsidiaries,
all of which statements shall be certified and prepared in accordance with generally accepted
accounting principles for each of the three fiscal years preceding the date of the most recent
certified balance sheet filed and for the interim period, if any, between the close of the most
recent of such fiscal years and the date of the most recent balance sheet filed and, with
respect to the profit and loss statement, for the corresponding period of the preceding year,
but statements for such interim and corresponding periods need not be certified, or, if the
issuer and its predecessors have been in existence for less than three fiscal years, the profit
and loss and other required statements for the periods for which it has been in existence.
(cc) If a substantial part of the proceeds of the offering is to be applied to the
purchase of any business, the same financial statements which would be required if that
business were the registrant.
(ii) If any financial statements are required to be certified, they shall be certified by
an independent public accountant duly registered and in good standing as such under the laws
of the place of his residence or principal office; and provided, further, that if the issuer does
not report its accounts in the normal course of its business on a consolidated basis, then it
may furnish, in lieu of consolidated statements, individual statements for it and its majority
owned subsidiaries.
(p)(i) Whether the security is subject to, bound by, or otherwise controlled by a
religious law, ethic, custom, or practice and, if so, a declaration that identifies all of the
following information:
(aa) Such law, ethic, custom, or practice.
(bb) Any precept or edict of such law, ethic, custom, or practice that would affect the
type or nature of activities of the issuer, whether any earnings may not be distributed to the
purchaser, whether any earnings may be distributed to third parties, and whether any religious
qualification may apply to the selection of directors, officers or managers of the issuer.
(ii) The issuer shall be solely responsible for disclosing and ensuring the accuracy
of the information required by this Subparagraph.
(2) Every registration statement filed under Subsection B of this Section shall be
accompanied by the following documents:
(a) A copy of the prospectus proposed to be used in complying with the requirements
of Paragraph (B)(3) of this Section.
(b) A copy of any notice, circular, advertisement, sales literature, letter, or
communication, if any such notice, circular advertisement, sales literature, letter, or
communication is to be used in connection with the offering, in respect of a security which,
if used, must state from whom a written prospectus meeting the requirements of Paragraph
(B)(3) of this Section may be obtained and must conform to such limitations as to content
and such other terms and conditions as the commissioner, by rules or regulations, deemed
necessary or appropriate in the public interest and for the protection of investors, may
prescribe.
(c) A specimen or copy of the certificate, if any, intended to represent the security
being registered; a copy of the issuer's articles of incorporation and bylaws or their
substantial equivalents, as currently in effect; and a copy of any indenture or other instrument
relating to the security to be registered.
(d) A signed opinion of legal counsel as to whether or not the security, when sold,
will be legally issued, fully paid, and nonassessable, and, if a debt security, will be a binding
obligation of the issuer.
(e) A copy of any underwriting or selling group agreement pursuant to which the
distribution is to be made.
(f) A copy of every management or other material contract referred to in
Subparagraph (C)(1)(m) of this Section.
(g) A signed copy of any professional opinions or any reports or certifications
specifically referred to in the prospectus.
(h) A copy of any literature concerning the issuer or the offering given to any persons
directly engaged in the sale of the securities.
(i) A written consent of each person who is, or who is named in the prospectus as
about to become, a director of the issuer or of any person occupying a similar status or
performing a similar function to the use of his name in the prospectus unless such director
or person has signed the registration statement.
D. Registration by notification. (1) Any security whose issuer or any predecessors
have been in continuous operation for at least five years may be registered by notification,
whether or not it is also eligible for registration by qualification under Subsection B of this
Section, if:
(a) There has been no default during the current fiscal year nor within three
preceding fiscal years in the payment of principal, interest, or dividends on any security of
the issuer, or any predecessor, with a fixed maturity or a fixed interest or dividend provision;
and
(b) The issuer and any predecessors during the past three fiscal years have had
average net earnings, determined in accordance with generally accepted accounting
principles, which are applicable to all securities without a fixed maturity or a fixed interest
or dividend provision and which:
(i) Equal at least five percent of the amount of securities without a fixed maturity or
a fixed interest or dividend provision outstanding at the date the registration statement is
filed, as measured by the maximum offering price or the market price on a day selected by
the registrant within thirty days before the date of filing the registration statement, whichever
is higher or, if there is neither a readily determinable market price nor an offering price, as
measured by book value on a day selected by the registrant and within ninety days of the date
of filing the registration statement; or
(ii) If the issuer and any predecessors have not had any securities without a fixed
maturity or a fixed interest or dividend provision outstanding for three full fiscal years, equal
at least five percent of the amount, as measured by the maximum public offering price, of
such securities which will be outstanding if all the securities being offered or proposed to be
offered, whether or not they are proposed to be registered or offered in this state, are issued.
(2) A registration statement under this Subsection shall be signed by the issuer, any
other person on whose behalf the offering is to be made, a registered dealer participating in
the offering, if any, or by any duly authorized agent of any such person and shall contain the
following information or documents, in addition to payment of the filing fee, and, if required,
a consent to service of process meeting the requirements of R.S. 51:718:
(a) A statement demonstrating eligibility for registration by notification.
(b) The issuer's name, address, and form of organization, the state, or foreign
jurisdiction, and the date of its organization, and the general character and location of its
business.
(c) With respect to any person on whose behalf any part of the offering is to be made
in a nonissuer distribution: his name and address and the amount of securities of the issuer
held by him as of the date of the filing of the registration statement.
(d) The information specified in Subparagraph (C)(1)(h) of this Section.
(e) Any prospectus proposed to be used in offering the securities in this state and a
copy of any underwriting or selling agreement relating to the offering.
(3) If no stop order is in effect and no proceeding is pending under R.S. 51:716, a
registration statement under this Subsection automatically becomes effective at 3:00 p.m.
central standard time or central daylight time, whichever is applicable, of the fifth full
business day after the filing of the registration statement, or at such earlier time as the
commissioner determines.
E. Small issue registration. (1) The sale of securities of an issuer by or on behalf of
such issuer or an affiliate of such issuer may be made pursuant to a registration statement
filed under this Subsection if:
(a) The aggregate amount of the total offering, within or outside this state, shall not
exceed five hundred thousand dollars, or such greater amount of not more than one million
five hundred thousand dollars as the commissioner may by rule or regulation permit less the
aggregate offering price for all securities sold within twelve months before the start of and
during the offering of securities under this Subsection; or
(b) The aggregate number of persons in this state purchasing securities registered
under this Subsection from the issuer and all affiliates of the issuer during any twelve month
period shall not exceed fifty persons, or such greater number that is not more than one
hundred, as the commissioner may by rule or regulation permit; however, any certificate or
certificates representing securities issued in a transaction subject to the numerical limitation
on the number of investors pursuant to this Subparagraph shall be marked for a period of one
year from the date of their issuance or sale to indicate clearly that they were registered
pursuant to this Subsection and that they may not be sold or transferred except in a
transaction which is exempt under this Part or pursuant to an effective registration statement
under this Part or in a transaction which is otherwise in compliance with this Part and shall
be executed with a statement to the effect that such securities have been purchased for
investment, for his own account. As used in this Subparagraph, the phrase "purchase for
investment" shall mean the purchase of any securities with the intent of holding such
securities for investment and without the intent of participating directly or indirectly in a
distribution of such securities. Any person who holds such securities for a period of one year
from the date such securities have been fully paid for by such person shall be presumed to
have purchased such securities for investment.
(2) A registration statement under this Subsection shall be signed by the issuer, its
chief executive officer, its principal financial officer, its comptroller or principal accounting
officer, and a majority of the board of directors or persons performing similar functions, or,
if there is no board of directors or persons performing similar functions, by the majority of
the persons or board having the power of management of the issuer. If the issuer is not a
corporation or partnership registered with the secretary of state, the registration statement
shall also include a copy of the issuer's articles of incorporation or partnership or their
substantial equivalents, as currently in effect, and a copy of any indenture of similar
instrument relating to the security to be registered.
(3) A prospectus, a copy of which shall be contained in the registration statement,
shall be delivered to any purchaser of securities registered pursuant to this Subsection prior
to or simultaneously with the execution by the purchaser of a written agreement to purchase,
the delivery of a confirmation of sale, or the payment for securities offered by means of such
prospectus, whichever occurs first. The prospectus under which securities registered
pursuant to this Subsection are sold shall contain the following:
(a) With respect to the issuer: its name, street address, form of organization, and its
telephone number; the state or foreign jurisdiction and date of its organization; a brief
description of the type and location of its business.
(b) The following financial statements which may, but need not, be certified:
(i) A balance sheet of the issuer or a consolidated balance sheet of the issuer and its
subsidiaries prepared in accordance with generally accepted accounting principles as of a
date within ninety days prior to the filing of the registration statement; and
(ii) A profit and loss statement of the issuer or consolidated statements of the issuer
and its subsidiaries prepared in accordance with generally accepted accounting principles for
each of the two fiscal years preceding the date of the balance sheet filed and for the interim
period, if any, between the close of the most recent of such fiscal years and the date of the
balance sheet filed and for the corresponding period of the preceding year or, if the issuer and
its predecessors have been in existence for less than two fiscal years, the profit and loss
statement for the periods for which it has been in existence; however, if the issuer does not
report its accounts in the normal course of its business on a consolidated basis, then it may
furnish, in lieu of consolidated statements, individual statements for it and its majority owned
subsidiaries.
(c) The information set forth in Subparagraphs (C)(1)(i) and (j) of this Section.
(d) With respect to every officer and director of the issuer or person occupying a
similar status or performing similar functions and with respect to every affiliate of the issuer,
a description of: all securities of the issuer and its subsidiaries which are beneficially owned
or expected to be beneficially owned, and the amount and type of consideration which was
or will be given for such securities, and any material interest in any other material
transactions with the issuer or any significant subsidiary of the issuer effected within the past
three years or expected to be effected.
(e) Any additional information which is needed to comply with R.S. 51:712(A)(2)
and which is not otherwise disclosed to the purchaser.
(4) The commissioner shall be authorized to accept a prospectus prepared by the
issuer if the prospectus has been subjected to an examination by the securities regulatory
authority of another state or territory of the United States which, in the discretion of the
commissioner, is equal to or greater than the examination provided in such cases by the
commissioner.
(5) Registration statements filed pursuant to this Subsection will become effective
if no stop order is in effect and no proceeding is pending under R.S. 51:716, at 3:00 p.m.
central standard time or central daylight time, whichever is applicable, on the tenth full
business day after the filing of the registration statement or at such earlier time as the
commissioner orders.
(6) Preliminary negotiations and agreements in contemplation of a registration and
sale of a security pursuant to this Subsection shall not constitute an "offer to sell," "offer for
sale," "offer," or "sale" of a security for the purposes of this Section unless, before a
registration statement relating thereto is effective, the seller receives some consideration for
such security, a contract for sale of such security is executed, or the security is sold.
(7) In case any of the financial statements contained in the registration statement
filed under this Subsection are certified, they shall be certified by an independent public
accountant duly registered and in good standing as such under the laws of the place of his
residence or principal office.
(8) If any accountant, attorney, engineer, or appraiser or any person whose profession
gives authority to a statement made by him is named in the registration statement as having
prepared an opinion referred to in the registration statement or as having certified any part
of the registration statement or is named as having prepared or certified a report of valuation
for use in connection with the registration statement, the written consent of such person to
the references to him in the registration statement shall be filed with the commissioner prior
to the effectiveness of the registration statement.
(9) With respect to registration statements filed under this Subsection the
commissioner shall be authorized to participate in any program designed to promote and
achieve compatibility with federal law and uniformity among the states and to promulgate
such rules and regulations as may be necessary to achieve such compatibility and uniformity.
(10) The commissioner shall treat as confidential and not subject to public inspection
all material filed by or on behalf of the issuer pursuant to this Subsection unless he shall
determine that such treatment is not consistent with the public interest, in which case he may
make public such of the filed information as he may deem necessary for protection of the
public interest.
(11) The commissioner may modify any legend required by this Subsection to
conform to standardized legends, but any modification shall ensure that the legend contains
substantially the same information required by this Part.
F. Nonprofit issuer registration. (1) Sales of securities issued by any person
organized and operated:
(a) Not for private profit; and
(b) No part of the net earnings of which inures to the benefit of any person, private
stockholder, or individual made by or on behalf of such issuer may be made pursuant to a
registration statement filed pursuant to this Subsection.
(2) A registration statement under this Subsection shall be signed by the issuer, its
chief executive officer, its principal financial officer, its comptroller or principal accounting
officer, and the majority of its board of directors or persons performing similar functions, or,
if there is no board of directors or persons performing similar functions, by the majority of
the persons or board having the power of management of the issuer, and shall contain the
following documents:
(a) A copy of the prospectus proposed to be used in complying with the requirements
of Paragraph (F)(4) of this Section.
(b) A copy of any notice, circular, advertisement, sales literature, letter, or
communication, if any such notice, circular, sales literature, letter, or communication is to
be used in connection with the offering, in respect of a security which, if used, must state
from whom a written prospectus meeting the requirements of Paragraph (F)(4) of this Section
may be obtained and must conform to such limitations as to content and such other terms and
conditions as the commissioner, by rules or regulations, deemed necessary or appropriate in
the public interest and for the protection of investors may prescribe.
(c) A specimen or copy of the securities being registered and a copy of the issuer's
articles of incorporation and bylaws or their substantial equivalents, as currently in effect.
(d) If the securities described in the prospectus forming a part of the registration
statement are to be secured by any interest in or lien upon any real or personal property, a
signed opinion of legal counsel which states that such interest or lien will be as described in
such prospectus and that such interest or lien has been filed of record and otherwise perfected
under applicable law.
(e) A copy of any underwriting or selling group agreement pursuant to which the
distribution is to be made.
(f) A copy of every management or other material contract referred to in the
prospectus.
(g) A signed copy of any professional opinion or any reports or certifications
specifically referred to in the prospectus.
(h) A copy of any literature concerning the issuer or the offering given to any person
directly engaged in the sale of securities.
(i) A written consent of each person who is, or who is named in the prospectus as
about to become, a director of the issuer or a person occupying a similar status or performing
a similar function to the use of his name in the prospectus unless such director or person has
signed the registration statement.
(j) If any accountant, attorney, engineer, or appraiser or any person whose profession
gives authority to a statement made by him is named in the registration statement as having
prepared an opinion referred to in the registration statement or as having certified any part
of the registration statement or is named as having prepared or certified a report of valuation
for use in connection with the registration statement, the written consent of such person to
the references to him in the registration statement.
(k) A copy of any trust indenture required by Paragraph (F)(3) of this Section.
(3)(a) If the securities to be registered are bonds, notes, debentures, evidences of
indebtedness, or any interest in such securities, the provisions for disbursing the proceeds of
such securities, for collecting and disbursing funds for the payment of principal of and
interest on such securities, and for governing the rights of the trustee and the holders of such
securities with respect to any collateral or other security therefor shall be governed by an
indenture between the issuer of such securities and a trustee or trustees.
(b) Each such trustee shall be an attorney duly admitted to practice before the highest
court of any state who is not regularly employed by the issuer or underwriter of the securities
subject to the indenture or a corporation which is organized and doing business under the
laws of the United States or any state, which is qualified to do business in Louisiana, which
is authorized to exercise corporate trust powers, and which is subject to supervision or
examination by an agency or authority of the United States or the state of its incorporation
or principal place of business:
(i) Provided that no such attorney or corporation may serve as trustee if such attorney
or corporation:
(aa) Serves as trustee under an indenture covering any other securities of the issuer
of the securities subject to the indenture.
(bb) Is an affiliate of the issuer or underwriter of the securities subject to the
indenture.
(cc) Is a guarantor of or an affiliate of an obligor upon or a guarantor of the securities
subject to the indenture.
(dd) Is the beneficial owner of, or holds as collateral security for an obligation which
is in default, five percent or more of the voting securities of, or ten percent or more of any
other class of security of the issuer of the securities subject to the indenture.
(ee) Is the beneficial owner of, or holds as collateral security for an obligation which
is in default, ten percent or more of any class of security of any person who, to the knowledge
of such attorney or corporation, owns fifty percent or more of the voting securities of the
issuer or any guarantor of the securities subject to the indenture.
(ii) Provided, further, that no such attorney nor any director or executive officer, or
persons performing similar functions, of such corporation:
(aa) Is a director, officer, partner, employee, appointee, or representative of the
issuer, any guarantor, or any underwriter of the securities subject to the indenture.
(bb) Is a guarantor or underwriter of or an obligor upon the securities subject to the
indenture.
(c) Such indenture shall in addition to the provisions specified in Subparagraph (a)
of this Paragraph contain:
(i) A provision requiring the trustee to maintain a current list of the names and
addresses of the holders of the securities subject to the indenture; and
(ii) A provision that the trustee, in case of any failure to make, when due, any
payment into any sinking fund for the repayment of the securities subject to the indenture or
any payment of the principal of or interest on the securities subject to the indenture, which
failure is not corrected within thirty days of the date such payment was due, shall have the
authority to commence a civil action to recover on behalf of the holders of the securities
subject to the indenture all payments of principal and interest which are due and have not
been paid; to declare the entire outstanding principal balance of an accrued but unpaid
interest on such securities to be immediately due and payable and to commence a civil action
to recover such principal and interest on behalf of the holders of the securities subject to the
indenture; to take possession of and dispose of any collateral security subject to the
indenture; and to secure such additional relief as the parties to the indenture shall provide;
and a provision that, upon occurrence of any such failure the trustee shall notify, to the extent
that it can identify them, the holders of such securities of the occurrence of such failure and
of its intentions with respect thereto.
(4) The prospectus required in this Paragraph shall be delivered to any purchaser of
securities registered pursuant to this Subsection prior to or simultaneously with the execution
by the purchaser of a written agreement to purchase, the delivery of a confirmation of sale,
or the payment for securities offered by means of such prospectus, whichever occurs first.
The prospectus under which securities registered pursuant to this Subsection are sold shall
contain the following:
(a) With respect to the issuer: its name, street address, form of organization, and
telephone number; the state or foreign jurisdiction and date of its organization; and a brief
description of the type of business or other endeavors it conducts.
(b) The following financial statements:
(i) A balance sheet of the issuer or a consolidated balance sheet of the issuer and its
subsidiaries prepared in accordance with generally accepted accounting principles as of the
date within ninety days prior to the filing of the registration statement.
(ii) A statement of source and application of funds of the issuer or consolidated
statements of the issuer and its subsidiaries prepared in accordance with generally accepted
accounting principles for each of the two fiscal years preceding the date of the balance sheet
filed and for the interim period, if any, between the close of the most recent of such fiscal
years and the date of the balance sheet filed and for the corresponding period of the preceding
year or, if the issuer and its predecessors have been in existence for less than two fiscal years,
the statement of source and application of funds for the periods for which it has been in
existence; provided, however, if the issuer does not report its accounts in the normal course
of its business on a consolidated basis, then it may furnish, in lieu of consolidated statements,
individual statements for it and its majority owned subsidiaries.
(c) The information set forth in Subparagraphs (C)(1)(i) and(j) of this Section.
(d) A summary of special risk factors, if any, involved in the purchase of such
securities.
(e) With respect to any underwriter of the securities being registered: a description
of all fees, commissions, expenses, and other payments and remunerations received or to be
received directly or indirectly by such underwriter and its affiliates in connection with the
sale of the securities being registered and a description of any affiliation, interest, or
arrangement such underwriter may have with any building contractor, supplier, paying agent,
or other person who may receive any proceeds from the sale of the securities being
registered.
(f) A description of the material terms of the securities to be registered and, if such
securities are bonds, notes, debentures, evidences of indebtedness, or any interest in such
securities, a description of the material terms of the indenture under which the securities are
to be issued.
(g) Any additional information needed to comply with R.S. 51:712(A)(2).
(5) In case any of the financial statements contained in the registration statement
filed under this Subsection are certified, they shall be certified by an independent public
accountant duly registered and in good standing as such under the laws of the place of his
residence or principal office.
(6) Registration statements filed pursuant to this Subsection will become effective
if no stop order is in effect and no proceeding is pending under R.S. 51:716 at 3:00 p.m.
central standard time or central daylight time, whichever is applicable, on the fifth full
business day after the filing of the registration statement or at such earlier time as the
commissioner orders.
G. Notice filing for federal covered securities. (1) Prior to the initial offer of a federal
covered security under Section 18(b)(2) of the federal Securities Act of 1933, as amended,
and for purposes of renewal, the issuer shall make a notice filing with the commissioner,
consisting of the following:
(a) A copy of the current registration statement filed by the issuer with the United
States Securities and Exchange Commission.
(b) A consent to service of process.
(c) An initial filing fee and an annual renewal fee equal to the fees prescribed in R.S.
51:706(A).
(2) The commissioner, by rule, may require the issuer of any security that is a federal
covered security under Section 18(b)(4)(E) of the Securities Act of 1933, as amended, to
make a notice filing no later than fifteen days after the first sale in this state of such federal
covered security on United States Securities and Exchange Commission Form D, together
with a consent to service of process and a filing fee.
(3)(a) With respect to any security that is a federal covered security under Section
18(b)(4)(C) of the Securities Act of 1933, as amended, and for purposes of renewal, the
issuer shall make a notice filing with the commissioner consisting of a copy of all documents
filed with the Securities and Exchange Commission pursuant to Section 4A(b) of the
Securities Act of 1933 when either of the following Items apply:
(i) The issuer's principal place of business, as defined in the rules and regulations of
the Securities and Exchange Commission, is in this state.
(ii) Purchases of fifty percent or more of the securities sold by the issuer pursuant to
an offering made in reliance on Section 18(b)(4)(C) of the Securities Act of 1933 are to
residents of this state.
(b) The issuer shall file with the commissioner the documents described in
Subparagraph (a) of this Paragraph at either of the following applicable times:
(i) When the issuer files the documents with the Securities and Exchange
Commission, if filing with the commissioner pursuant to Item (a)(i) of this Paragraph.
(ii) Within fifteen days of the date the issuer becomes aware that it meets the criteria
described in Item (a)(ii) of this Paragraph, which in no event should be later than fifteen days
from the date of completion of the offering.
(c) The documents filed pursuant to the provisions of Subparagraph (b) of this
Paragraph are effective for twelve months from the date of the filing, and the issuer shall pay
a nonrefundable filing fee of one hundred fifty dollars to the commissioner when an initial
or any subsequent notice is filed.
H. Registration of TIER 1 Regulation A securities. (1) Any security that qualifies
under Tier 1 of Regulation A adopted pursuant to Section 3(b) of the Federal Securities Act
of 1933, as now or hereafter amended, may be registered under the terms and conditions
provided in this Subsection by filing all of the following:
(a) A notice of intention to sell executed by the issuer, any other person on whose
behalf the offering is to be made, a dealer registered under this Part, or any duly authorized
agent of any such person who sets forth the name and address of the applicant, the name and
address of the issuer, and the title of the securities to be offered in this state.
(b) A copy of the notification on Form 1-A or any form substituted therefor, and
related offering circular or offering sheet, including other exhibits, filed with the Securities
and Exchange Commission.
(c) A filing fee of one-tenth of one percent of the aggregate price of the securities to
be offered to be sold in this state. In no case shall the fee be less than one hundred dollars
nor more than one thousand dollars. In addition there shall be a charge of two hundred fifty
dollars to be used to defray the expenses of the commissioner. All fees and charges paid in
accordance with this Subparagraph, whether paid at the time of filing or at the time of
renewal, shall be transmitted to the state treasurer for credit to the state general fund, except
that the two hundred fifty dollar fee required pursuant to this Subparagraph shall be retained
by the commissioner to be used for the enforcement of this Part generally.
(d) A consent to service of process in the form prescribed by R.S. 51:718 that has
been executed by the person who executed the notice of intention to sell, unless the person
has previously filed with the commissioner an irrevocable consent to service of process in
the form prescribed by R.S. 51:718.
(2) A registration pursuant to this Subsection becomes effective when ordered by the
commissioner.

Legislative History

Acts 1985, No. 722, §1; Acts 1999, No. 250, §1; Acts 2006, No. 544, §1, eff. June 22, 2006; Acts 2008, No. 274, §1; Acts 2010, No. 7, §4, eff. May 19, 2010; Acts 2012, No. 369, §1; Acts 2014, No. 119, §1, eff. May 16, 2014; Acts 2014, No. 224, §1; Acts 2016, No. 141, §1, eff. May 19, 2016; Acts 2018, No. 74, §1, eff. Jan. 1, 2019.