Last week, the Senate passed three bipartisan bills that promote access to capital for small businesses and startups. The Senate bills, the House corollaries of which originally passed on March 9, 2017, include the following:
- S. 444, the Supporting America's Innovators Act (H.R. 1219). Amends the Investment Company Act of 1940 to exempt from the definition of an "investment company," for purposes of specified limitations applicable to such a company under the Act, a qualifying venture capital fund that has no more than 250 investors. Specifically, the bill applies to a venture capital fund that has less than $10 million in aggregate capital contributions and uncalled committed capital.
- S. 416, the Small Business Capital Formation Enhancement Act (H.R. 1312). Amends the Small Business Investment Incentive Act of 1980 with respect to the annual government-business forum of the SEC to review the current status of problems and programs relating to small business capital formation.
- S. 488, Encouraging Employee Ownership Act (H.R. 1343). Requires the SEC to increase, from $5 million to $10 million the threshold beyond which an issuer is required to provide investors with additional disclosures related to compensatory benefit plans.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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