What Are the Main Differences between Regulation D Rule 506(B) and 506(C)?

The main difference between Rule 506(b) and 506(c) is how an issuer can solicit investors. Under Rule 506(b), issuers cannot use general solicitation or advertising to market the securities.

However, they can sell to an unlimited number of accredited investors and up to 35 sophisticated non-accredited investors. In contrast, Rule 506(c) permits general solicitation and advertising, but issuers must take reasonable steps to verify that all purchasers are accredited investors, and sales to non-accredited investors are not allowed.