Limited Offering Transactions are directed at not more than how many persons during the previous 12 consecutive months?

• A. 5
• B. 10
• C. 20
• D. 50

Answer: (B)

Limited Offering Transactions are private placements that can qualify for an exemption when the sale is made to only a small number of noninstitutional buyers. The key rule is that, in the previous 12 consecutive months, the issuer may direct the offering to no more than a limited number of such purchasers. That cap is ten. Institutional buyers do not count toward this limit, so sales to banks, insurance companies, registered investment companies, and similar institutions don’t affect the exemption.

If the offering is directed to more than ten noninstitutional buyers in the prior year, the transaction no longer qualifies as a Limited Offering and would typically require registration or another exemption. The 12-month period is a rolling lookback from the date of the sale, not a calendar year. For example, selling to nine individuals plus two institutions in the last year stays within the limit, while selling to eleven individuals would exceed it.