Maine Wants to Promote Growth of Small Businesses by Easing Access to Capital.
Maine now becomes the next state that has passed legislation, “An Act to Increase Funding for Startups”, that allows equity crowdfunding within their state borders. Maine business may now raise up to $1 million in capital by selling shares in their company to investors. The legislation became law without the signature of Governor Paul LePage. The Maine House approved the legislation mid February on a lopsided vote of 129 for and 1 against.
Participating businesses will register with the Maine Office of Securities setting funding goals and deadlines. Individual investors will be able to purchase up to $5000 in equity from a single business. The funding goal must be met within the deadline the listing company has set.
Maine has also created a path where a short form registration may be filed with the state to aid in streamlining the process. The Maine act requires issuers to share filed income tax returns, if any and financial statements certified by the principle executive officer.
Maine views this step as encouraging growth in small businesses and a potential boost to their local economy. A growing number of state legislatures have taken this approach and is in stark contrast to the extended process of the federal retail crowdfunding legislation, that has been stymied by bureaucratic inertia. The state of Michigan recently passed their own crowdfunding legislation but they are looking to take it a step further by authorizing local stock exchanges for this new type of asset.
While many states are moving forward with local exemptions, the North American Securities Administrators Association (NASAA – the interest group for state securities regulators), has stated that crowdfunding is one of their top areas of concern.
The legislation is embedded below.
[scribd id=212720540 key=key-ah0yw6tfw9m459whdj mode=scroll]