An offering statement gives people interested in investing in your co-op the information they need to make an informed decision. Essentially, it outlines the risks involved in purchasing a co-op’s securities. An offering statement must include:
- A description of the co-op’s business
- How it will use the money it raises
- The names and positions of directors and officers
- How operations are financed
- Up-to-date financial statements
When to file an offering statement
A co-op must file an offering statement when:
- They are planning to sell securities to more than 35 people
- When the sale of securities increases the number of co-op security holders to more than 35 people
Exemptions
- If the issue of securities does not increase the number of security holders to more than 35 people, an offering statement is not required
- Co-ops with more than 35 security holders are not required to file offering statements if:
- They plan to issue membership shares or member loans as a condition of membership, where issue value does not exceed $1,000 per member per year, and the total held by any member is less than $10,000
- They plan to issue new shares or member loans to members by using patronage returns owed to members
- They plan to use dividends, owed to shareholders, to issue new shares