At the start of the 2016 Regular Legislative Session, Delegates Lane and Faircloth introduced House Bill 2615, which creates the West Virginia Small Business Capital Act (the "Act"). The Act exempts the offer and sale of certain securities from the requirements of the West Virginia Uniform Securities Act and is designed to provide small businesses with additional start-up options.
Under the Act, the offer and sale of a security is exempt from the requirements of the West Virginia Uniform Securities Act if the issuer, purchaser, offer and sale meet the following requirements:
(1) the issuer is a for-profit entity organized under the laws of West Virginia with its principal place of business in West Virginia, is registered with the West Virginia Secretary of State and derives at least 80% of its operating revenue from inside West Virginia;
(2) the purchaser is a West Virginia resident or an entity organized under the laws of West Virginia with its principal place of business in West Virginia;
(3) the purchaser does not acquire more than $25,000 in securities from the issuer, provided that the purchaser is not an accredited investor;
(4) the offer and sale complies with the requirements of the federal securities laws and SEC regulations governing intrastate securities offerings; and
(5) the sum of all cash and other consideration received by the issuer from the issuance of securities under the Act does not exceed $1 million.
House Bill 2615 has been forwarded to the House Small Business, Entrepreneurship and Economic Development Committee for review and consideration.