It is not required by law that you talk with an attorney before talking with an investor, but it is wise to do so. The rules regulating investments and securities are very complicated. Unless you are very sophisticated in both business and law, contacting an attorney will be a wise decision.

In short, you need to check your state law. Many states have prospectus exemptions similar to regulation A of the Federal Securities Act. Regulation A provides an alternative to the customary filing of a prospectus. Under regulation A, if the aggregate offering price is not more than 5 million, including no more than 1.5 million offered by all existing security holders, and if the issuer, underwriters, and other specified parties meet specified requirements, a prospectus does not have to be filed.

Regulation A differs from other exemptions by requiring the issuer to file an "offering statement" with the SEC. The contents of the statement are similar to those of a prospectus. However, issuers may solicit investor interest before filing an offering statement. This enables the issuer an opportunity to measure investment interest. To find out the availability of an exemption to filing a prospectus, it is wise to check with the Secretary of State or an attorney who practices securities law.

State Blue-Sky laws are a collection of state regulations that regulate transactions involving securities. The federal Securities Exchange Commission is the main enforcer in regulating the nation’s securities. The NASD and the various Exchanges also play a role in regulating securities. In addition, each individual state has its own securities regulatory body, usually known as the State Securities Commissioner. Although most of the States Securities regulations follow, or are modeled after, the Uniform Securities Act, each state has its own regulations. These regulations are collectively known as "Blue Sky" laws.

Most states have left the anti-fraud regulations to the SEC. However, most states do retain the power and authority to bring actions against securities violators pursuant to state Blue Sky laws. Further, each state has its own securities act, which governs, at least, the registration and reporting requirements for broker-dealers and stock brokers doing business in the state.

In short, it is difficult to do without seeking the advice of an attorney. The offering of securities is heavily regulated to prevent fraud. All offerings must comply with federal and state securities laws. A private offering is a recognized exception from federal registration. Under the Federal Securities Act, "transactions by an issuer not involving a public offering," are exempted from the registration requirement of the Federal Securities Act. (15 U.S.C. §77d(2))

Determining the difference between a private offering and a public offering is often difficult. In general, the exemption has been available to sophisticated investors who are fully informed. The investor would usually have access to the same information that a formal registration would provide. The SEC places the burden on the offeror to demonstrate that the investor was sophisticated and fully informed.

The rules used to distinguish between a public offering and a private offering are complicated and difficult to understand. Many of the federal rules compliment the state rules. However, in some situations, the federal rules preempt the state rules. Before any shares are sold, it is highly recommended that you seek the advice of an attorney who practices within the area of securities.

Yes, with exceptions. General corporate law provides that any shareholder or holder of a voting trust certificate may inspect, copy, or make extracts from the accounting books, records, and minutes of any domestic corporation if requested. The request must usually be in writing. However, corporate law limits the right of inspection of accounting books to a purpose reasonable related to the holder’s interest as a shareholder or as the holder of a voting trust.