Even though the concept has been
glorified, as you will see, other than a concept, many paying a little, cannot capitalize a New Age Corporaton™'s
operations in America without the addition and inclusion of a great deal more. Therefore, "many paying a little"
is more myth than fact if 1244 Stock is not used during the initial capitalization or funding phase. Otherwise, the first
reality that a New Age incorporator must consider and be aware of is the many that are paying a little must
be accredited investors.
When the Security Act was passed
in 1933, Black people and poor people were not considered, otherwise the law would have been written differently. However,
when the law is studied carefully, there are provisions within it that will help any group of people with moderate to low
income to use it to fund or capitalize a corporate entity. However, these individuals are limited to $1,000,000.00.
Today, such a corporate entity
would be classified as a Small Business Corporation or SBC. In order for an individual to qualify as an accredited investor,
he or she must accomplish at least one of the following: 1) earn an individual income of more than $200,000
per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of
income. 2) have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
3) be a general partner, executive officer, director or a related combination thereof for the issuer of a
security being offered.
These investors are considered
to be fully functional without all the restrictions of the SEC. An employee benefit plan or a trust can be qualified as an
accredit investors if total assets are in excess of $5 million. As you can plainly see, all these requirements virtually and
literally eliminates 99.9% of the Black community. Therefore, as already stated, other than a concept, many paying
a little, cannot fund a New Age Corporation's™ operation without considerable help from other sources.
To use a
"many a litte concept",
alone, without 1244 Stock, automatically eliminates using SEC Rules 505 and 506. Like UII in 1996, any
New Age Corporation
would be limited to using Rule 504 that restricts funding to $1,000,000.00 and places the added burden of doing it during
a 12 month period. Even though Rule 504 does not mention accredited investor, there is no accompanying rule or subsection
that separates it from Rule 501. Therefore, in the abundance of caution, it is both wise and prudent to limit any stock offering
to accredited investors. Hence, even under Rule 504, a
New Age Corporation could not and cannot rely solely on
"many
paying a little" as a funding strategy in the Black community without IRC Section 1244. {
Click here to review Rule 504}
