H.R. 4171: Small Entrepreneurs’ Empowerment and Development Act of 2025

This bill, known as the Small Entrepreneurs’ Empowerment and Development Act of 2025, aims to amend the Securities Act of 1933 to create a new exemption for small issuers, allowing them to engage in what are termed "micro-offerings." Here are the key points of the bill:

Micro-Offering Exemption

The bill introduces a provision that enables small issuers to sell securities without the extensive disclosures or filings typically required under the Securities Act. Specifically:

• Micro-offerings involve sales of securities by an issuer, where the total amount of securities sold in the past 12 months does not exceed $250,000.

Disqualification Provisions

The bill mandates the Securities and Exchange Commission (SEC) to establish rules for disqualification from eligibility for this micro-offering exemption. These provisions will include:

• Individuals subject to certain regulatory enforcement actions will be disqualified from offering securities under this exemption.
• The disqualification criteria will largely mirror existing regulations that identify certain offenses, such as fraudulent or deceptive conduct.

Antifraud Protections

Even though this bill exempts small issuers from extensive reporting requirements, it does not exempt them from federal antifraud laws. This means that:

• Issuers must still comply with laws that prohibit fraudulent activities and deceptive practices in the sale of securities.

State Regulations

The bill also updates how state regulations interact with the federal micro-offering exemption. It allows states more flexibility, enabling them to recognize the new exemption under their own securities laws.

Implementation Timeline

The SEC is required to enact the disqualification provisions within 270 days after the bill becomes law.

Overall Impact

Overall, the Small Entrepreneurs’ Empowerment and Development Act of 2025 aims to provide a more accessible pathway for small companies to raise capital while maintaining a framework that protects investors from fraud.

Relevant Companies

None found