Record the Rule 701 ceiling for a compensatory offer
Key facts
- Human involvement
- RedLawyer-led
- How AI is used
- From figures already in the file, list the aggregate sales price under Rule 701 for the consecutive 12-month period the file identifies, and the three ceilings in Rule 701(d)(2). Flag whether the file's figure exceeds $10 million. Do not write the offer document, and do not value property that the file has not already valued.
- What the lawyer must review
- You write the offer document. Rule 701 (17 CFR § 230.701) exempts offers and sales under a written compensatory benefit plan or written compensation contract of the issuer, its parents, its majority-owned subsidiaries, or majority-owned subsidiaries of the issuer's parent, to the employees, directors, general partners, trustees where the issuer is a business trust, officers, consultants and advisors, and family members who acquire from those persons through gifts or domestic relations orders. It is available only to the issuer. It does not cover resales, and it is not available for a plan or scheme to raise capital. Consultants and advisors must be natural persons, provide bona fide services, and those services must not be in connection with the offer or sale of securities in a capital-raising transaction or promote or maintain a market for the securities. Any amount may be offered. Sales in any consecutive 12-month period must not exceed the greatest of $1,000,000, 15 percent of the total assets of the issuer measured at the most recent balance sheet date if no older than the last fiscal year end, or 15 percent of the outstanding amount of the class being offered and sold, measured the same way. The aggregate sales price includes cash, property, notes, cancellation of debt, or other consideration. Options are valued at the exercise price, and the sales price of an option is determined when the grant is made. If the aggregate sales price or amount sold in any consecutive 12-month period exceeds $10 million, the issuer must also deliver, a reasonable period of time before sale, the disclosure paragraph (e) names, including financial statements required by Part F/S of Form 1-A as of a date no more than 180 days before the sale. The line items of Part F/S were not opened. Securities issued under the section are restricted securities under Rule 144.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Supporting preparation only. Potential support includes identifying points for review. Confirm the tool’s capability and permitted scope. The tool writes nothing into the document. Substantive advice, judgement and any restricted content remain with the responsible human. |
| Lawyer | Perform the substantive analysis and decisions. Independently check any permitted supporting work and approve the exact output for its intended use. |
Checklist
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Review operative clauses in the complete document, including definitions, cross-references, schedules and inconsistencies with the instructions.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.