NORTH CAROLINA GENERAL ASSEMBLY
1971 SESSION

CHAPTER 572
HOUSE BILL 596

AN ACT TO AMEND G.S. 78-4 RELATING TO CERTAIN TRANSACTIONS EXEMPT FROM THE SECURITIES LAW.

The General Assembly of North Carolina do enact:

Section 1.  Subdivision (9) of G.S. 78-4 is hereby amended by rewriting the same to read as follows:
"(9)	Subscriptions for shares of the capital stock of a corporation or subscriptions for interests in a limited partnership, prior to the incorporation of such corporation or recording of the certificate of such limited partnership, when no expense is incurred, and no commission, compensation or remuneration is paid or given by the purchaser for, or in connection with, the sale or disposition of such securities and the corporation or partnership is organized or the subscription price refunded within six months after the date of the subscription."
Sec. 2.  G.S. 78-23 is hereby amended by adding a new section titled (g) (1) as follows:
"Whoever shall sell or causes to be sold, or offers for sale or causes to be offered for sale, any security in this State under the claim of an exemption permitted by any subsection of G.S. 78-3 or G.S. 78-4, after having been notified by the Secretary of State to cease and desist the sale of such security pending investigation, findings and enforcement pursuant to G.S. 78-16, shall be deemed guilty of a violation of this Chapter, and upon conviction thereof shall be imprisoned in the state prison for not less than one, nor more than five years, or fined in any sum not more than one thousand dollars ($1,000), or both."
Sec. 3.  This act shall become effective upon ratification.
In the General Assembly read three times and ratified, this the 16th day of June, 1971.