The Securities and Exchange Commission's Regulation D (SEC Reg D) specifies that privately held securities cannot be sold unless they are either registered and sold on the open market or exempted from registration and sold via a private placement. The process of making a private placement is not difficult provided the seller follows all the rules set forth in Reg D. Most Reg D exemptions place restrictions on how many purchasers can be non-accredited. A non-accredited investor is deficient regarding the finances and knowledge to fully understand the risks involved in the private purchase of securities.

Instructions
Determine the type of private placement. There are three types under Reg D:
1. Rule 504 exemptions: This is an exemption from the requirement to register up to $1 million a year of offered securities. A Rule 504 exemption does limit the number of non-accredited buyers and does not impose on sellers any specific information disclosures to offerees, except for complying with common anti-fraud statutes.
2. Rule 505 exemptions: Under this exemption, you may sell up to $5 million in securities to an unlimited number of accredited investors and up to 35 non-accredited ones. The issued securities are restricted for at least one year, and within that time period, purchasers cannot resell without either registering the securities or obtaining a new exemption. Public advertising and solicitation of an offering is prohibited.
3. Rule 506 exemptions: Most companies use Rule 506 to raise amounts from $1 million up to $50 million or more. Rule 506 lets a company sell exempted securities to unlimited accredited investors and up to 35 non-accredited investors.

Obtain permission to use the government electronic filing system called EDGAR. You accomplish this by visiting the filermanagement.edgarfiling.sec.gov web page and following the instructions to obtain a Central Index Key (CIK) and password from the SEC.

Prepare an online Form D filing on EDGAR. Visit the onlineforms.edgarfiling.sec.gov web page and use the CIK and password you obtained in Step 2. Follow the instructions to enter all required information for the type of exemption you seek, as described in Step 1. Print out the completed private placement memorandum.

Prepare a subscription agreement for the sale of the private securities. This is a sales contract that must be signed by a purchaser. There are online templates available on the Internet for this type of document.

Prepare an investor suitability questionnaire for potential investors. This is a basic questionnaire that asks investors about particular financial data to qualify them as accredited or non-accredited investors. Search the Internet for suitable templates.

Sell your private stock and collect proceeds using the three documents you have prepared while following the rules laid down by the SEC in Reg D.