Rule 506

Rule 506 is a regulation under U.S. securities law that allows companies to raise investment funds without registering with the SEC, provided they meet certain criteria. It permits private companies to offer securities to an unlimited number of accredited investors (those with high income or net worth) and up to 35 non-accredited investors who meet specific financial sophistication requirements. Importantly, these offerings cannot involve general advertising or public solicitation. This rule helps companies access capital efficiently while maintaining investor protections, balancing flexibility for issuers with safeguards for investors.