Rule 504, which provides an exemption for non-reporting companies unless they are "blank check" issuers, stipulates that:

The sale of up to $1,000,000 of securities in a 12-month period is permitted provided that there is no general solicitation, the securities sold are restricted securities and cannot be resold except pursuant to a registration statement or exemption, and a notice must be filed with the SEC within 15 days after the first sale.

Rule 504 does not provide an exemption under any state laws. In certain limited circumstances where an offering is conducted under state accrerdited investor exemptions, securities offered under Rule 504 may be freely transferrable.

Unlike Rules 505 and 506, Rule 504 does not mandate that specified disclosure be provided to purchasers. Nonetheless, the business person should take care that sufficient information is provided to meet the full disclosure obligations which exist under the antifraud provisions of the securities laws.