Because Regulation D Rule 506(c) is a federally "covered security" under the National Securities Markets Improvement Act (NSMIA), the State of Ohio cannot subject your offering to its own registration process or "merit reviews" (where a state decides if your deal is fair).
However, Ohio is legally permitted to require a notice filing and collect a fee. If you accept even a single dollar from an investor residing in Ohio, you must comply with their Blue Sky notice rules.
Ohio's requirements for a 506(c) offering are straightforward and low-cost compared to other states.
1. The Core Requirements
To satisfy the Ohio Division of Securities, you must submit:
- The Federal Form D: A copy or printout of the exact Form D that you electronically filed with the SEC.
- The Filing Fee: A flat fee of $100. (Checks are made payable to the Ohio Division of Securities, though most issuers file and pay digitally now).
2. Strict Timeline (The 15-Day Window)
- You must file the notice in Ohio within 15 days of the date of the first sale of securities to an Ohio resident.
- Late Penalty: If you miss this 15-day window, Ohio will still accept the filing, but they will charge you an additional $100 late penalty fee (bringing your total to $200).
3. How to File
While you can technically mail a physical copy, the industry standard is to file electronically via the NASAA Electronic Filing Depository (EFD) at efdnasaa.org.
The EFD allows you to plug in your SEC Form D data, select Ohio (and any other states where your investors live), and pay all state fees electronically in a single session.
4. Important Ohio Nuances to Keep in Mind
No Consent to Service of Process Required
Historically, out-of-state companies had to file a separate form (Form U-2) appointing the state as their legal agent. Ohio eliminated this requirement for Rule 506 offerings. The Division interprets federal law as prohibiting any state-specific paperwork outside of the standard Form D and the fee.
Broker-Dealer Licensing Traps (Commissions)
This is where many founders accidentally break Ohio law:
- The "No-Compensation" Exception: You, your co-founders, and your employees do not need a broker-dealer license to sell your own company's shares to Ohio investors, provided no one is being paid a commission, transaction-based fee, or special bonus for closing those investors.
- The Finder Trap: If you pay a "finder," a consultant, or an unlicenced partner a percentage or success fee for introducing you to an Ohio investor, you are violating Ohio Blue Sky laws. In Ohio, transaction-based compensation can only be paid to licensed, registered broker-dealers.
Amendments are Free
If your offering changes or you must file an annual amendment with the SEC, you must also file that amendment with Ohio. Fortunately, Ohio does not charge an additional fee for filing amendments.
Summary Checklist: If an Ohio resident invests, make sure you don't pay anyone a commission to bring them in, file your Form D via the EFD within 15 days of their check clearing, and pay the $100 state fee.