Regulation A is a rule adopted by the SEC for companies to exempt them from the registration requirements for the public offerings. Dormer Corporation with the plans to raise securities through Regulation A must merge or acquire a company which is not in its development stage and is recognized globally or at least in the United States and its territories. Dormer Corporation is in its development stage and as per the norms of Regulation A a company should not supposedly be in its development stage with no purpose for the business or is to be acquired by some ambiguous company (Knyazeva, 2016).
Since the company wants to raise the maximum capital from the issuance, Dormer Corporation can undertake the Tier 2 under which the firm can raise an amount up to 50 million dollar (Knyazeva, 2016). Although the Tier 2 needs to maintain a financial accountant to report the financial statements to the SEC. The place of incorporation of Dormer Corporation must be in the USA, Canada or their territories or District of Columbia. It is also necessary that Dormer Corporation is not registered under the Investment Company of Act of 1940 . An investment company is not eligible for Regulation A under Regulation §230.251(Knyazeva, 2016). Dormer Corporation also should not have interests in oil or gas rights or mineral rights which might exempt the company from the Regulation A rule (SUSPENDED, 2008).
The Section 2(a)(48) companies seeking for Regulation A are not eligible for the rule according to the SEC (Knyazeva, 2016). The companies that are barred under the Rule 262 (§230.262) are also barred from the exemption.
Knyazeva, A. (2016). Regulation A+: What Do We Know So Far?. Available at SSRN 3367840.
SUSPENDED, T. (2008). SECURITIES ACT OF 1933. Proceeding File No, 3, 12925.