(1) The following securities are exempted from Sections 61-1-7 and 61-1-15:
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(f) (i) a security issued by a person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association; and
(ii) a security issued by a corporation organized under Title 3, Chapter 1, General Provisions Relating to Agricultural Cooperative Associations, and a security issued by a corporation to which that chapter is made applicable by compliance with Section 3-1-21;
Division Interpretive Commentary:
This exemption is for the issuance of securities by non-profits, religious, educational, benevolent, charitable, fraternal, social, athletic organizations. It also covers reformatory purposes, chamber of commerce or trade and professional associations. This exemptions is available only to organizations who are exclusively organized for purposes mention above.
If there is a question whether the organization falls under this exemption, it may be helpful to refer to IRS Publication #78. IRS Publication #78 is a listing of national organizations that are considered to be exempt from paying taxes, or charitable. This publication is not all inclusive. If the organization is not listed then refer to IRS Code section 501(c).
Title 3, Chapter 1 and section 3-1-21 refer to Agricultural Cooperative Associations.
Division Policy Positions:
Pooled Income Funds - In a charitable pooled income fund, as defined by IRS code section 642(c)(5), an individual donates funds or assets to a charity. The charity then invests the donated funds or assets and will pay the donor a fixed amount of income. When the donor, and in many cases the donor's spouse dies, the assets remaining are available to the charity to use. The Division has taken the position that no registration is required for the interests of the pooled income fund because the contribution to the pooled income fund is motivated by donative intent, as opposed to investment intent.
However, the following conditions must be met:
The Division issued a no-action letter to this effect at: Geological Society of America Foundation, File # A14167-21, June 8, 1992