Earlier this week, I wrote about the exemption in Corporations Code Section 25102(e) for offers and sales of evidences of indebtedness in transactions not involving a "public offering". This, of course, begs the question of what constitutes a "public offering". The Commissioner has in fact adopted a safe-harbor rule. To put into the safe harbor, Rule 260.102.2 requires the following:
The rule excludes from the count of offerees and purchasers any of investors described in Section 25102(i) of the Code (See also Rule 260.102.10). Also, a husband and wife (together with any custodian or trustee acting for their minor children) are counted as one person.
What if you don't meet these requirements? All may not be lost because the rule provides that it does not create any presumption that nonconforming offers involve a public offering. Moreover, the rule requires that any determination with respect to a transaction not conforming to the rule be made without reference to the rule.
The rule is a safe harbor only with respect to the exemptions found in Sections 25102(e) and (g) and Section 25104(a). California's limited offering exemption, found in Section 25102(f), doesn't prohibit public offerings per se - subdivision (4) of the statute prohibits the publication of any advertisement. If you think that these are the same concepts, take a look at Section 25104(a) which requires that there be no publication of advertisements and no public offering. See also Rule 260.102.12(j) (applicable to Section 25102(f)).