Two bills sponsored by U.S. Rep. Jim Himes that would help expanding businesses access resources needed for company growth and job creation were approved by a congressional panel Wednesday in Washington, D.C.
The two bills would increase the number of investors permitted to hold shares in either a company or a community bank before the organization is required to register with the Securities and Exchange Commission.
These bills make common sense changes that will help growing businesses access the capital they need to expand and create jobs while maintaining important protections for investors, Himes, D-4th District, said in a statement. As we seek creative solutions to our nations dangerous jobs crisis, we should look to changes like these that improve the business climate without harming our environment, eliminating health protections, or reducing our ability to invest in the education and infrastructure we know are critical to long-term prosperity.
Himes bills would both raise the number of shareholders permitted to invest in an institution before that entity must register with the SEC or go public. Currently, both banks and private companies are subject to a 500-investor threshold, which limits the amount of capital they can raise before they must comply with the expensive reporting requirements associated with SEC registration.
Additionally, in the current economic climate, successful initial public offerings require considerable capital and management time when businesses start-up and on an ongoing basis.
These bills would give small companies and community banks the flexibility to remain private until they have the capital and capability to launch a successful IPO.
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