A. The following securities are exempted from the securities registrationrequirements of this chapter:
1. Any security (including a revenue obligation) issued or guaranteed by theUnited States, any state, any political subdivision of a state or any agencyor corporate or other instrumentality of one or more of the foregoing; or anycertificate of deposit for any of the foregoing;
2. Any security issued or guaranteed by Canada, any Canadian province, anypolitical subdivision of any such province, any agency or corporate or otherinstrumentality of one or more of the foregoing or any other foreigngovernment with which the United States currently maintains diplomaticrelations, if the security is recognized as a valid obligation by such issueror guarantor;
3. Any security issued by and representing an interest in or a debt of, orguaranteed by, the International Bank for Reconstruction and Development, orany national bank, or any bank or trust company organized under the laws ofany state or trust subsidiary organized under the provisions of the TrustSubsidiary Act (§ 6.1-32.1 et seq.);
4. Any security issued by and representing an interest in or a debt of, orguaranteed by, any federal savings and loan association or savings bank, orby any savings and loan association or savings bank which is organized underthe laws of this Commonwealth;
5. Any security issued or guaranteed by an insurance company licensed totransact insurance business in this Commonwealth;
6. Any security issued by any credit union, industrial loan association orconsumer finance company which is organized under the laws of thisCommonwealth and is supervised and examined by the Commission;
7. Any security issued or guaranteed by any railroad, other common carrier orpublic service company supervised as to its rates and the issuance of itssecurities by a governmental authority of the United States, any state,Canada or any Canadian province;
8. Any security which is listed or approved for listing upon notice ofissuance on the New York Stock Exchange or the American Stock Exchange or anyother security of the same issuer which is of senior or substantially equalrank; any security called for by subscription rights or warrants admitted totrading in any of said exchanges; or any warrant or right to subscribe to anyof the foregoing securities;
9. Any commercial paper which arises out of a current transaction or theproceeds of which have been or are to be used for current transactions, andwhich evidences an obligation to pay cash within nine months after the dateof issuance, exclusive of days of grace, or any renewal thereof which islikewise limited, or any guaranty of such paper or of any such renewal;
10. Any security issued in connection with an employee's stock purchase,savings, pension, profit-sharing or similar benefit plan. The Commission mayby rule or order, as to any security issued pursuant to such plan, specify ordesignate persons eligible to participate in such plan;
11. Any security issued by a cooperative association organized as acorporation under the laws of this Commonwealth;
12. Any security listed on an exchange registered with the United StatesSecurities and Exchange Commission or quoted on an automated quotation systemoperated by a national securities association registered with the UnitedStates Securities and Exchange Commission and approved by regulations of theState Corporation Commission;
13. Any security issued by any issuer organized under the laws of any foreigncountry and approved by rule or regulation of the Commission.
B. The following transactions are exempted from the securities, broker-dealerand agent registration requirements of this chapter except as expresslyprovided in this subsection:
1. Any isolated transaction by the owner or pledgee of a security, whethereffected through a broker-dealer or not, which is not directly or indirectlyfor the benefit of the issuer;
2. Any nonissuer distribution by a registered broker-dealer and itsregistered agent of a security that has been outstanding in the hands of thepublic for the past five years, if the issuer in each of the past threefiscal years has lawfully paid dividends on its common stock aggregating atleast four percent of its current market price;
3. Any transaction by a registered broker-dealer and its registered agentpursuant to an unsolicited order or offer to buy;
4. Any transaction in a bond or other evidence of indebtedness secured by areal or chattel mortgage or deed of trust or by an agreement for the sale ofreal estate or chattels, if the entire indebtedness secured thereby isoffered and sold as a unit;
5. Any transaction in his official capacity by a receiver, trustee inbankruptcy or other judicially appointed officer selling securities pursuantto court order;
6. Any offer or sale to a corporation, investment company or pension orprofit-sharing trust or to a broker-dealer;
7. a. Any sale of its securities by an issuer or any sale of securities by aregistered broker-dealer and its registered agent acting on behalf of anissuer if, after the sale, such issuer has not more than 35 security holders,and if its securities have not been offered to the general public byadvertisement or solicitation; or
b. To the extent the Commission by rule or order permits, any sale of itssecurities by an issuer or any sale of securities by a registeredbroker-dealer and its registered agent acting on behalf of an issuer to notmore than 35 persons in the Commonwealth during any period of 12 consecutivemonths, whether or not the issuer or any purchaser is then present in theCommonwealth, if the issuer or broker-dealer reasonably believes that all thepurchasers in the Commonwealth are purchasing for investment, and if thesecurities have not been offered to the general public by advertisement orgeneral solicitation. The Commission may, by rule or order, as to anysecurity or transaction or any type of security or transaction, withdraw orfurther condition this exemption, increase or decrease the number ofpurchasers permitted, or waive the condition relating to their investmentintent. The Commission may assess and collect in connection with any filingpursuant to this exemption a nonrefundable fee not to exceed $250.
With respect to this subdivision 7, and except to the extent the Commissionby rule or order may otherwise permit, the number of security holders of anissuer or the number of purchasers from an issuer, as the case may be, shallnot be deemed to include the security holders of any other corporation,partnership, limited liability company, unincorporated association or trustunless it was organized to raise capital for the issuer. Notwithstanding theprovisions of subdivision 15, the merger or consolidation of corporations,partnerships, limited liability companies, unincorporated associations orother entities shall be a violation of this chapter if the surviving or newentity has more than 35 security holders or purchasers and all the securitiesof the parties thereto were issued under this exemption, unless all of theparties thereto have been engaged in transacting business for more than twoyears prior to the merger or consolidation;
8. Any transaction pursuant to an offer to existing security holders of theissuer including holders of transferable warrants issued to existing securityholders and exercisable within 90 days of their issuance, if either (i) nocommission or other remuneration (other than a standby commission) is paid orgiven directly or indirectly for soliciting any security holder in thisCommonwealth or (ii) the issuer first notifies the Commission in writing ofthe terms of the offer and the Commission does not by order disallow theexemption within five full business days after the date of the receipt of thenotice;
9. Any offer (but not a sale) of a security for which registration statementshave been filed, but are not effective, under both this chapter and theSecurities Act of 1933; but this exemption shall not apply while a stop orderis in effect or, after notice to the issuer, while a proceeding orexamination looking toward such an order is pending under either act;
10. The issuance of not more than three shares of common stock to one or moreof the incorporators of a corporation and the initial transfer thereof;
11. Sales of an issue of bonds, aggregating $150,000 or less, secured by afirst lien deed of trust on realty situated in Virginia, to 30 persons orless who are residents of Virginia;
12. Any offer or sale of any interest in any partnership, corporation,association or other entity created solely to provide residential housinglocated in the Commonwealth, provided that such offer or sale is by theissuer or by a real estate broker or real estate agent duly licensed inVirginia;
13. The Commission is authorized to create by rule a limited offeringexemption, the purpose of which shall be to further the objectives ofcompatibility with similar exemptions from federal securities regulation anduniformity among the states; providing that such rule shall not exemptbroker-dealers or agents from the registration requirements of this chapter,except in the case of an agent of the issuer who either (i) receives no salescommission directly or indirectly for offering or selling the securities or(ii) effects transactions in a security exempt from registration under theSecurities Act of 1933 pursuant to rules and regulations promulgated under §4 (2) thereof. Any filing made with the Commission pursuant to any exemptioncreated under this subdivision shall be accompanied by a $250 fee;
14. The issuance of any security dividend, whether the corporationdistributing the dividend is the issuer of the security or not, if nothing ofvalue is given by stockholders for the distribution other than the surrenderof a right to a cash dividend where the stockholder can elect to take adividend in cash or in a security;
15. Any transaction incident to a right of conversion or a statutory orjudicially approved reclassification, recapitalization, reorganization,quasi-reorganization, stock split, reverse stock split, merger,consolidation, sale of assets, or exchange of securities;
16. Any offer or sale of a security issued by a Virginia church if the offerand sale are only to its members and the security is offered and sold only byits members who are Virginia residents and who do not receive remuneration orcompensation directly or indirectly for offering or selling the security;
17. Any offer or sale of securities issued by a professional business entity(as defined in subsection A of § 13.1-1102) to a person licensed or otherwiselegally authorized to render within this Commonwealth the same professionalservices (as defined in subsection A of § 13.1-1102) rendered by theprofessional business entity. Notwithstanding the foregoing, nothing in thissubdivision shall be deemed to provide that shares of stock, partnership ormembership interests or other representations of ownership in a professionalbusiness entity are securities except to the extent otherwise provided bysubsection A of this section;
18. Any offer that is communicated on the Internet, World Wide Web or similarproprietary or common carrier electronic system and that is in compliancewith requirements prescribed by rule or order of the Commission;
19. To the extent the Commission by rule or order permits, any offer or saleto an accredited investor, as defined by the Commission, if the issuerreasonably believes before the sale that the accredited investor, eitheralone or with the accredited investor's representative, has such knowledgeand experience in financial and business matters as to be capable ofevaluating the merits and risks of the prospective investment. The Commissionmay assess and collect in connection with any filing pursuant to thisexemption a nonrefundable fee not to exceed $250;
20. Any transaction by a bank pursuant to an unsolicited offer or order tobuy or sell any security, provided such transaction is not effected by anemployee of the bank who is also an employee of a broker-dealer.
C. In any proceeding under this chapter, the burden of proving an exemptionshall be upon the person claiming it.
(Code 1950, § 13-113; 1956, c. 428; 1966, c. 186; 1970, c. 286; 1972, c. 683;1974, cc. 86, 830; 1975, cc. 75, 500; 1976, c. 656; 1977, c. 111; 1978, c.397; 1981, cc. 347, 356, 362; 1982, c. 262; 1983, cc. 231, 516; 1984, cc.298, 771; 1989, c. 388; 1990, c. 6; 1991, c. 223; 1993, c. 75; 1995, cc. 208,213, 235; 1996, c. 16; 1997, cc. 279, 538; 1999, c. 92; 2001, c. 722; 2003,c. 595; 2007, c. 457.)
A. The following securities are exempted from the securities registrationrequirements of this chapter:
1. Any security (including a revenue obligation) issued or guaranteed by theUnited States, any state, any political subdivision of a state or any agencyor corporate or other instrumentality of one or more of the foregoing; or anycertificate of deposit for any of the foregoing;
2. Any security issued or guaranteed by Canada, any Canadian province, anypolitical subdivision of any such province, any agency or corporate or otherinstrumentality of one or more of the foregoing or any other foreigngovernment with which the United States currently maintains diplomaticrelations, if the security is recognized as a valid obligation by such issueror guarantor;
3. Any security issued by and representing an interest in or a debt of, orguaranteed by, the International Bank for Reconstruction and Development, orany national bank, or any bank or trust company organized under the laws ofany state or trust subsidiary organized under the provisions of the TrustSubsidiary Act (§ 6.1-32.1 et seq.);
4. Any security issued by and representing an interest in or a debt of, orguaranteed by, any federal savings and loan association or savings bank, orby any savings and loan association or savings bank which is organized underthe laws of this Commonwealth;
5. Any security issued or guaranteed by an insurance company licensed totransact insurance business in this Commonwealth;
6. Any security issued by any credit union, industrial loan association orconsumer finance company which is organized under the laws of thisCommonwealth and is supervised and examined by the Commission;
7. Any security issued or guaranteed by any railroad, other common carrier orpublic service company supervised as to its rates and the issuance of itssecurities by a governmental authority of the United States, any state,Canada or any Canadian province;
8. Any security which is listed or approved for listing upon notice ofissuance on the New York Stock Exchange or the American Stock Exchange or anyother security of the same issuer which is of senior or substantially equalrank; any security called for by subscription rights or warrants admitted totrading in any of said exchanges; or any warrant or right to subscribe to anyof the foregoing securities;
9. Any commercial paper which arises out of a current transaction or theproceeds of which have been or are to be used for current transactions, andwhich evidences an obligation to pay cash within nine months after the dateof issuance, exclusive of days of grace, or any renewal thereof which islikewise limited, or any guaranty of such paper or of any such renewal;
10. Any security issued in connection with an employee's stock purchase,savings, pension, profit-sharing or similar benefit plan. The Commission mayby rule or order, as to any security issued pursuant to such plan, specify ordesignate persons eligible to participate in such plan;
11. Any security issued by a cooperative association organized as acorporation under the laws of this Commonwealth;
12. Any security listed on an exchange registered with the United StatesSecurities and Exchange Commission or quoted on an automated quotation systemoperated by a national securities association registered with the UnitedStates Securities and Exchange Commission and approved by regulations of theState Corporation Commission;
13. Any security issued by any issuer organized under the laws of any foreigncountry and approved by rule or regulation of the Commission.
B. The following transactions are exempted from the securities, broker-dealerand agent registration requirements of this chapter except as expresslyprovided in this subsection:
1. Any isolated transaction by the owner or pledgee of a security, whethereffected through a broker-dealer or not, which is not directly or indirectlyfor the benefit of the issuer;
2. Any nonissuer distribution by a registered broker-dealer and itsregistered agent of a security that has been outstanding in the hands of thepublic for the past five years, if the issuer in each of the past threefiscal years has lawfully paid dividends on its common stock aggregating atleast four percent of its current market price;
3. Any transaction by a registered broker-dealer and its registered agentpursuant to an unsolicited order or offer to buy;
4. Any transaction in a bond or other evidence of indebtedness secured by areal or chattel mortgage or deed of trust or by an agreement for the sale ofreal estate or chattels, if the entire indebtedness secured thereby isoffered and sold as a unit;
5. Any transaction in his official capacity by a receiver, trustee inbankruptcy or other judicially appointed officer selling securities pursuantto court order;
6. Any offer or sale to a corporation, investment company or pension orprofit-sharing trust or to a broker-dealer;
7. a. Any sale of its securities by an issuer or any sale of securities by aregistered broker-dealer and its registered agent acting on behalf of anissuer if, after the sale, such issuer has not more than 35 security holders,and if its securities have not been offered to the general public byadvertisement or solicitation; or
b. To the extent the Commission by rule or order permits, any sale of itssecurities by an issuer or any sale of securities by a registeredbroker-dealer and its registered agent acting on behalf of an issuer to notmore than 35 persons in the Commonwealth during any period of 12 consecutivemonths, whether or not the issuer or any purchaser is then present in theCommonwealth, if the issuer or broker-dealer reasonably believes that all thepurchasers in the Commonwealth are purchasing for investment, and if thesecurities have not been offered to the general public by advertisement orgeneral solicitation. The Commission may, by rule or order, as to anysecurity or transaction or any type of security or transaction, withdraw orfurther condition this exemption, increase or decrease the number ofpurchasers permitted, or waive the condition relating to their investmentintent. The Commission may assess and collect in connection with any filingpursuant to this exemption a nonrefundable fee not to exceed $250.
With respect to this subdivision 7, and except to the extent the Commissionby rule or order may otherwise permit, the number of security holders of anissuer or the number of purchasers from an issuer, as the case may be, shallnot be deemed to include the security holders of any other corporation,partnership, limited liability company, unincorporated association or trustunless it was organized to raise capital for the issuer. Notwithstanding theprovisions of subdivision 15, the merger or consolidation of corporations,partnerships, limited liability companies, unincorporated associations orother entities shall be a violation of this chapter if the surviving or newentity has more than 35 security holders or purchasers and all the securitiesof the parties thereto were issued under this exemption, unless all of theparties thereto have been engaged in transacting business for more than twoyears prior to the merger or consolidation;
8. Any transaction pursuant to an offer to existing security holders of theissuer including holders of transferable warrants issued to existing securityholders and exercisable within 90 days of their issuance, if either (i) nocommission or other remuneration (other than a standby commission) is paid orgiven directly or indirectly for soliciting any security holder in thisCommonwealth or (ii) the issuer first notifies the Commission in writing ofthe terms of the offer and the Commission does not by order disallow theexemption within five full business days after the date of the receipt of thenotice;
9. Any offer (but not a sale) of a security for which registration statementshave been filed, but are not effective, under both this chapter and theSecurities Act of 1933; but this exemption shall not apply while a stop orderis in effect or, after notice to the issuer, while a proceeding orexamination looking toward such an order is pending under either act;
10. The issuance of not more than three shares of common stock to one or moreof the incorporators of a corporation and the initial transfer thereof;
11. Sales of an issue of bonds, aggregating $150,000 or less, secured by afirst lien deed of trust on realty situated in Virginia, to 30 persons orless who are residents of Virginia;
12. Any offer or sale of any interest in any partnership, corporation,association or other entity created solely to provide residential housinglocated in the Commonwealth, provided that such offer or sale is by theissuer or by a real estate broker or real estate agent duly licensed inVirginia;
13. The Commission is authorized to create by rule a limited offeringexemption, the purpose of which shall be to further the objectives ofcompatibility with similar exemptions from federal securities regulation anduniformity among the states; providing that such rule shall not exemptbroker-dealers or agents from the registration requirements of this chapter,except in the case of an agent of the issuer who either (i) receives no salescommission directly or indirectly for offering or selling the securities or(ii) effects transactions in a security exempt from registration under theSecurities Act of 1933 pursuant to rules and regulations promulgated under §4 (2) thereof. Any filing made with the Commission pursuant to any exemptioncreated under this subdivision shall be accompanied by a $250 fee;
14. The issuance of any security dividend, whether the corporationdistributing the dividend is the issuer of the security or not, if nothing ofvalue is given by stockholders for the distribution other than the surrenderof a right to a cash dividend where the stockholder can elect to take adividend in cash or in a security;
15. Any transaction incident to a right of conversion or a statutory orjudicially approved reclassification, recapitalization, reorganization,quasi-reorganization, stock split, reverse stock split, merger,consolidation, sale of assets, or exchange of securities;
16. Any offer or sale of a security issued by a Virginia church if the offerand sale are only to its members and the security is offered and sold only byits members who are Virginia residents and who do not receive remuneration orcompensation directly or indirectly for offering or selling the security;
17. Any offer or sale of securities issued by a professional business entity(as defined in subsection A of § 13.1-1102) to a person licensed or otherwiselegally authorized to render within this Commonwealth the same professionalservices (as defined in subsection A of § 13.1-1102) rendered by theprofessional business entity. Notwithstanding the foregoing, nothing in thissubdivision shall be deemed to provide that shares of stock, partnership ormembership interests or other representations of ownership in a professionalbusiness entity are securities except to the extent otherwise provided bysubsection A of this section;
18. Any offer that is communicated on the Internet, World Wide Web or similarproprietary or common carrier electronic system and that is in compliancewith requirements prescribed by rule or order of the Commission;
19. To the extent the Commission by rule or order permits, any offer or saleto an accredited investor, as defined by the Commission, if the issuerreasonably believes before the sale that the accredited investor, eitheralone or with the accredited investor's representative, has such knowledgeand experience in financial and business matters as to be capable ofevaluating the merits and risks of the prospective investment. The Commissionmay assess and collect in connection with any filing pursuant to thisexemption a nonrefundable fee not to exceed $250;
20. Any transaction by a bank pursuant to an unsolicited offer or order tobuy or sell any security, provided such transaction is not effected by anemployee of the bank who is also an employee of a broker-dealer.
C. In any proceeding under this chapter, the burden of proving an exemptionshall be upon the person claiming it.
(Code 1950, § 13-113; 1956, c. 428; 1966, c. 186; 1970, c. 286; 1972, c. 683;1974, cc. 86, 830; 1975, cc. 75, 500; 1976, c. 656; 1977, c. 111; 1978, c.397; 1981, cc. 347, 356, 362; 1982, c. 262; 1983, cc. 231, 516; 1984, cc.298, 771; 1989, c. 388; 1990, c. 6; 1991, c. 223; 1993, c. 75; 1995, cc. 208,213, 235; 1996, c. 16; 1997, cc. 279, 538; 1999, c. 92; 2001, c. 722; 2003,c. 595; 2007, c. 457.)
A. The following securities are exempted from the securities registrationrequirements of this chapter:
1. Any security (including a revenue obligation) issued or guaranteed by theUnited States, any state, any political subdivision of a state or any agencyor corporate or other instrumentality of one or more of the foregoing; or anycertificate of deposit for any of the foregoing;
2. Any security issued or guaranteed by Canada, any Canadian province, anypolitical subdivision of any such province, any agency or corporate or otherinstrumentality of one or more of the foregoing or any other foreigngovernment with which the United States currently maintains diplomaticrelations, if the security is recognized as a valid obligation by such issueror guarantor;
3. Any security issued by and representing an interest in or a debt of, orguaranteed by, the International Bank for Reconstruction and Development, orany national bank, or any bank or trust company organized under the laws ofany state or trust subsidiary organized under the provisions of the TrustSubsidiary Act (§ 6.1-32.1 et seq.);
4. Any security issued by and representing an interest in or a debt of, orguaranteed by, any federal savings and loan association or savings bank, orby any savings and loan association or savings bank which is organized underthe laws of this Commonwealth;
5. Any security issued or guaranteed by an insurance company licensed totransact insurance business in this Commonwealth;
6. Any security issued by any credit union, industrial loan association orconsumer finance company which is organized under the laws of thisCommonwealth and is supervised and examined by the Commission;
7. Any security issued or guaranteed by any railroad, other common carrier orpublic service company supervised as to its rates and the issuance of itssecurities by a governmental authority of the United States, any state,Canada or any Canadian province;
8. Any security which is listed or approved for listing upon notice ofissuance on the New York Stock Exchange or the American Stock Exchange or anyother security of the same issuer which is of senior or substantially equalrank; any security called for by subscription rights or warrants admitted totrading in any of said exchanges; or any warrant or right to subscribe to anyof the foregoing securities;
9. Any commercial paper which arises out of a current transaction or theproceeds of which have been or are to be used for current transactions, andwhich evidences an obligation to pay cash within nine months after the dateof issuance, exclusive of days of grace, or any renewal thereof which islikewise limited, or any guaranty of such paper or of any such renewal;
10. Any security issued in connection with an employee's stock purchase,savings, pension, profit-sharing or similar benefit plan. The Commission mayby rule or order, as to any security issued pursuant to such plan, specify ordesignate persons eligible to participate in such plan;
11. Any security issued by a cooperative association organized as acorporation under the laws of this Commonwealth;
12. Any security listed on an exchange registered with the United StatesSecurities and Exchange Commission or quoted on an automated quotation systemoperated by a national securities association registered with the UnitedStates Securities and Exchange Commission and approved by regulations of theState Corporation Commission;
13. Any security issued by any issuer organized under the laws of any foreigncountry and approved by rule or regulation of the Commission.
B. The following transactions are exempted from the securities, broker-dealerand agent registration requirements of this chapter except as expresslyprovided in this subsection:
1. Any isolated transaction by the owner or pledgee of a security, whethereffected through a broker-dealer or not, which is not directly or indirectlyfor the benefit of the issuer;
2. Any nonissuer distribution by a registered broker-dealer and itsregistered agent of a security that has been outstanding in the hands of thepublic for the past five years, if the issuer in each of the past threefiscal years has lawfully paid dividends on its common stock aggregating atleast four percent of its current market price;
3. Any transaction by a registered broker-dealer and its registered agentpursuant to an unsolicited order or offer to buy;
4. Any transaction in a bond or other evidence of indebtedness secured by areal or chattel mortgage or deed of trust or by an agreement for the sale ofreal estate or chattels, if the entire indebtedness secured thereby isoffered and sold as a unit;
5. Any transaction in his official capacity by a receiver, trustee inbankruptcy or other judicially appointed officer selling securities pursuantto court order;
6. Any offer or sale to a corporation, investment company or pension orprofit-sharing trust or to a broker-dealer;
7. a. Any sale of its securities by an issuer or any sale of securities by aregistered broker-dealer and its registered agent acting on behalf of anissuer if, after the sale, such issuer has not more than 35 security holders,and if its securities have not been offered to the general public byadvertisement or solicitation; or
b. To the extent the Commission by rule or order permits, any sale of itssecurities by an issuer or any sale of securities by a registeredbroker-dealer and its registered agent acting on behalf of an issuer to notmore than 35 persons in the Commonwealth during any period of 12 consecutivemonths, whether or not the issuer or any purchaser is then present in theCommonwealth, if the issuer or broker-dealer reasonably believes that all thepurchasers in the Commonwealth are purchasing for investment, and if thesecurities have not been offered to the general public by advertisement orgeneral solicitation. The Commission may, by rule or order, as to anysecurity or transaction or any type of security or transaction, withdraw orfurther condition this exemption, increase or decrease the number ofpurchasers permitted, or waive the condition relating to their investmentintent. The Commission may assess and collect in connection with any filingpursuant to this exemption a nonrefundable fee not to exceed $250.
With respect to this subdivision 7, and except to the extent the Commissionby rule or order may otherwise permit, the number of security holders of anissuer or the number of purchasers from an issuer, as the case may be, shallnot be deemed to include the security holders of any other corporation,partnership, limited liability company, unincorporated association or trustunless it was organized to raise capital for the issuer. Notwithstanding theprovisions of subdivision 15, the merger or consolidation of corporations,partnerships, limited liability companies, unincorporated associations orother entities shall be a violation of this chapter if the surviving or newentity has more than 35 security holders or purchasers and all the securitiesof the parties thereto were issued under this exemption, unless all of theparties thereto have been engaged in transacting business for more than twoyears prior to the merger or consolidation;
8. Any transaction pursuant to an offer to existing security holders of theissuer including holders of transferable warrants issued to existing securityholders and exercisable within 90 days of their issuance, if either (i) nocommission or other remuneration (other than a standby commission) is paid orgiven directly or indirectly for soliciting any security holder in thisCommonwealth or (ii) the issuer first notifies the Commission in writing ofthe terms of the offer and the Commission does not by order disallow theexemption within five full business days after the date of the receipt of thenotice;
9. Any offer (but not a sale) of a security for which registration statementshave been filed, but are not effective, under both this chapter and theSecurities Act of 1933; but this exemption shall not apply while a stop orderis in effect or, after notice to the issuer, while a proceeding orexamination looking toward such an order is pending under either act;
10. The issuance of not more than three shares of common stock to one or moreof the incorporators of a corporation and the initial transfer thereof;
11. Sales of an issue of bonds, aggregating $150,000 or less, secured by afirst lien deed of trust on realty situated in Virginia, to 30 persons orless who are residents of Virginia;
12. Any offer or sale of any interest in any partnership, corporation,association or other entity created solely to provide residential housinglocated in the Commonwealth, provided that such offer or sale is by theissuer or by a real estate broker or real estate agent duly licensed inVirginia;
13. The Commission is authorized to create by rule a limited offeringexemption, the purpose of which shall be to further the objectives ofcompatibility with similar exemptions from federal securities regulation anduniformity among the states; providing that such rule shall not exemptbroker-dealers or agents from the registration requirements of this chapter,except in the case of an agent of the issuer who either (i) receives no salescommission directly or indirectly for offering or selling the securities or(ii) effects transactions in a security exempt from registration under theSecurities Act of 1933 pursuant to rules and regulations promulgated under §4 (2) thereof. Any filing made with the Commission pursuant to any exemptioncreated under this subdivision shall be accompanied by a $250 fee;
14. The issuance of any security dividend, whether the corporationdistributing the dividend is the issuer of the security or not, if nothing ofvalue is given by stockholders for the distribution other than the surrenderof a right to a cash dividend where the stockholder can elect to take adividend in cash or in a security;
15. Any transaction incident to a right of conversion or a statutory orjudicially approved reclassification, recapitalization, reorganization,quasi-reorganization, stock split, reverse stock split, merger,consolidation, sale of assets, or exchange of securities;
16. Any offer or sale of a security issued by a Virginia church if the offerand sale are only to its members and the security is offered and sold only byits members who are Virginia residents and who do not receive remuneration orcompensation directly or indirectly for offering or selling the security;
17. Any offer or sale of securities issued by a professional business entity(as defined in subsection A of § 13.1-1102) to a person licensed or otherwiselegally authorized to render within this Commonwealth the same professionalservices (as defined in subsection A of § 13.1-1102) rendered by theprofessional business entity. Notwithstanding the foregoing, nothing in thissubdivision shall be deemed to provide that shares of stock, partnership ormembership interests or other representations of ownership in a professionalbusiness entity are securities except to the extent otherwise provided bysubsection A of this section;
18. Any offer that is communicated on the Internet, World Wide Web or similarproprietary or common carrier electronic system and that is in compliancewith requirements prescribed by rule or order of the Commission;
19. To the extent the Commission by rule or order permits, any offer or saleto an accredited investor, as defined by the Commission, if the issuerreasonably believes before the sale that the accredited investor, eitheralone or with the accredited investor's representative, has such knowledgeand experience in financial and business matters as to be capable ofevaluating the merits and risks of the prospective investment. The Commissionmay assess and collect in connection with any filing pursuant to thisexemption a nonrefundable fee not to exceed $250;
20. Any transaction by a bank pursuant to an unsolicited offer or order tobuy or sell any security, provided such transaction is not effected by anemployee of the bank who is also an employee of a broker-dealer.
C. In any proceeding under this chapter, the burden of proving an exemptionshall be upon the person claiming it.
(Code 1950, § 13-113; 1956, c. 428; 1966, c. 186; 1970, c. 286; 1972, c. 683;1974, cc. 86, 830; 1975, cc. 75, 500; 1976, c. 656; 1977, c. 111; 1978, c.397; 1981, cc. 347, 356, 362; 1982, c. 262; 1983, cc. 231, 516; 1984, cc.298, 771; 1989, c. 388; 1990, c. 6; 1991, c. 223; 1993, c. 75; 1995, cc. 208,213, 235; 1996, c. 16; 1997, cc. 279, 538; 1999, c. 92; 2001, c. 722; 2003,c. 595; 2007, c. 457.)
