Frequently Asked Questions:

 

1.  What is Belay Empire Unincorporated?

Belay Empire Unincorporated is a 508 (c) (1) (a) Association, that exists in the financial space as a religious, biblical, and ancestral-based financial institution that offers loans. 

 

2.  Who is Belay Empire Unincorporated target market?

Belay Empire Unincorporated aims to provide services for minorities, private individuals, and Indigenous Peoples in North America.

 

3.  Why the need for the type of loan service Belay Empire Unincorporated offers?

Belay Empire Unincorporated is dedicated to providing loans that are 100% free of usury; making the process lawful, ethical, fair, and reasonable for minorities, private individuals, and Indigenous Peoples. 

 

4.  Where is Belay Empire Unincorporated located? 

Belay Empire Unincorporated is located in North America (Republic) in California State (Republic).

 

5.  Does Belay Empire Unincorporated have any exceptions or exemptions? 

Yes, Belay Empire Unincorporated has mandatory exceptions and exemptions

from registration, licensing, and taxes.

 

6.  Is Belay Empire Unincorporated registered with the Security and Exchange Commission (SEC)?

No, Belay Empire Unincorporated falls under Rule 506(b) of Regulation D “safe harbor” for the following reasons:

 

a. Belay Empire Unincorporated is not a publicly traded company, publicly held company, publicly listed company, or public limited company.

 

b. Belay Empire Unincorporated does not offer any public securities.

 

c. Belay Empire Unincorporated investors are private Indigenous investors.

 

d. Belay Empire Unincorporated does not take any deposits from the public.

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7.  What is a 508 (c) (1) (a)?

26 U.S. Code § 508 - Special rules with respect to section 501(c)(3) organizations.

 

(a)New organizations must notify Secretary that they are applying for recognition of section 501(c)(3) status Except as provided in subsection (c), an organization organized after October 9, 1969, shall not be treated as an organization described in section 501(c)(3)—

 

(1)unless it has given notice to the Secretary in such manner as the Secretary may by regulations prescribe, that it is applying for recognition of such status, or

 

(2)for any period before the giving of such notice, if such notice is given after the time prescribed by the Secretary by regulations for giving notice under this subsection.

 

(b)Presumption that organizations are private foundations

Except as provided in subsection (c), any organization (including an organization in existence on October 9, 1969) which is described in section 501(c)(3) and which does not notify the Secretary, at such time and in such manner as the Secretary may by regulations prescribe, that it is not a private foundation shall be presumed to be a private foundation.

 

(c) Exceptions

 

(1) Mandatory exceptions

Subsections (a) and (b) shall not apply to—

 

(A) churches, their integrated auxiliaries, and conventions or associations of churches, or

 

(B) any organization which is not a private foundation (as defined in section 509(a)) and the gross receipts of which in each taxable year are normally not more than $5,000.

 

Other Relevant Information:

 

FINANCIAL CODE - FIN DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] 

( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) CHAPTER 1. General Provisions [22000 - 22172]  ( Chapter 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

 

22050.

(e) This division does not apply to any person who makes five or fewer loans in a 12-month period, these loans are commercial loans as defined in Section 22502, and the loans are incidental to the business of the person relying upon the exemption. 

 

22064.

  (a) This division does not apply to the following:

 

(1) A program-related investment defined in subsection (c) of Section 4944 of the Internal Revenue Code and United States Treasury Regulations Section 53.4944-3 that is made by a private foundation, tax-exempt organization within the meaning of Section 509(a) of the Internal Revenue Code.

 

(2) A loan, guaranty, or investment made by a public charity, tax-exempt organization within the meaning of paragraph (1), (2), or (3) of subsection (a) of Section 509 of the Internal Revenue Code that meets all of the following requirements:

 

(A) The primary purpose of the loan, guaranty, or investment is to accomplish one or more of the exempt purposes of the public charity making the loan, as described in Section 170(c)(2)(B) of the Internal Revenue Code.

 

(B) Neither the production of income nor the appreciation of property is a significant purpose of the loan, guaranty, or investment.

 

(C) No purpose of the loan, guaranty, or investment is to accomplish one or more of the purposes described in Section 170(c)(2)(D) of the Internal Revenue Code.

 

(b) Subdivision (a) shall not exempt from the provisions of this division a tax-exempt organization that is making consumer loans as defined in Sections 22203 and 22204.

 

(c) A loan that is secured by any assets owned by an individual shall be exempt under subdivision (a) only if the individual providing the security is an “accredited investor” as defined in paragraph (5) or (6) of subsection (a) of Section 230.501 of Title 17 of the Code of Federal Regulations. Property held by an individual for personal, family, or household purposes, including an individual’s personal residence, may not be taken as security for a loan.

 

(d) A program-related investment by a private foundation, and any loan, guaranty, or investment made by a public charity that is exempt under subdivision (a) is subject to the implied covenant of good faith and fair dealing under Section 1655 of the Civil Code.

 

(e) (1) Subdivision (a) shall exempt from the provisions of this division a program-related investment by a private foundation, or a loan, guaranty, or investment by a public charity, only if the following conditions are satisfied:

 

(A) The organization making the program-related investment, loan, guaranty, or investment is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code and is organized and operated exclusively for one or more of the purposes described in Section 501(c)(3) of the Internal Revenue Code.

 

(B) No part of the net earnings of the organization making the program-related investment, loan, guaranty or investment inures to the benefit of a private shareholder or individual.

 

(C) No broker’s fee will be paid in connection with the making of the program-related investment, loan, guaranty, or investment or placement of the program-related investment, loan, guaranty or investment.

 

(2) This subdivision does not prohibit the organization making the program-related investment, loan, guaranty, or investment from charging interest on the loan or investment or fees on the guaranty.

 

(f) Subdivision (a) shall only exempt from the provisions of this division a program-related investment by a private foundation or a loan, guaranty, or investment by a public charity that is made for the primary purpose of accomplishing one or more of the organization’s exempt purposes described in Section 501(c)(3) of the Internal Revenue Code, and no significant purpose of which is the production of income or the appreciation of property within the meaning of subsection (c) of Section 4944 of the Internal Revenue Code. A recipient shall be required to use all funds received from the private foundation or the public charity only for the charitable purposes for which the program-related investment, loan, guaranty, or investment was made.

 

(g) Subdivision (a) shall only exempt from the provisions of this division a program-related investment by a private foundation or a loan, guaranty, or investment by a public charity if the organization consummates not more than 35 loans in a calendar year. In the making and negotiating of these loans, the private foundation or public charity shall take into consideration the financial ability of the recipients to repay the loans in the time and manner provided.

 

(h) Nothing in this section is intended to abrogate or diminish the application of any other applicable laws that are designed to govern the tax-exempt organizations described in subdivision (a), including, but not limited to, laws pertaining to recordkeeping and reporting to the Attorney General and the Internal Revenue Service or to protect borrowers, including, but not limited to, laws pertaining to licenses, unfair competition, usury, and conflicts of interest.

 

(Amended by Stats. 2009, Ch. 103, Sec. 1. (AB 401) Effective January 1, 2010.)

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U.S. SECURITIES AND EXCHANGE COMMISSION

 

Exempt Offerings

We explain the exemptions from registration that are most frequently asked about.

 

Private placements - Rule 506(b)

Section 4(a)(2) of the Securities Act exempts from registration transactions by an issuer not involving any public offering.

 

Section 4(a)(2)

Rule 506(b) of Regulation D is considered a “safe harbor” under Section 4(a)(2). It provides objective standards that a company can rely on to meet the requirements of the Section 4(a)(2) exemption. Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors. An offering under Rule 506(b), however, is subject to the following requirements:

• no general solicitation or advertising to market the securities

• securities may not be sold to more than 35 non-accredited investors (all non-accredited investors, either alone or with a purchaser representative, must meet the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment)

 

If non-accredited investors are participating in the offering, the company conducting the offering:

• must give any non-accredited investors disclosure documents that generally contain the same type of information as provided in Regulation A offerings (the company is not required to provide specified disclosure documents to accredited investors, but, if it does provide information to accredited investors, it must also make this information available to the non-accredited investors as well)

• must give any non-accredited investors financial statement information specified in Rule 506 and

• should be available to answer questions from prospective purchasers who are non-accredited investors

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Purchasers in a Rule 506(b) offering receive “restricted securities." A company is required to file a notice with the Commission on Form D within 15 days after the first sale of securities in the offering. Although the Securities Act provides a federal preemption from state registration and qualification under Rule 506(b), the states still have authority to require notice filings and collect state fees.

 

Rule 506(b) offerings are subject to “bad actor” disqualification provisions.