TEXT OF ACT SMALL BUSINESS INVESTMENT ACT OF 1958 (Public Law 699, 85th Cong., 2d sess., as amended) AN ACT To make equity capital and long-term credit more readily available for small- Be it enacted by the Senate and House of Representatives of the United States SEC. 101. This Act, divided into titles and sections according to the follow- ing table of contents, may be cited as the "Small Business Investment Act of Sec. 201. Establishment of Small Business Investment Division. Sec. 202. Provision and purposes of funds. [Omitted as no longer current.] TITLE III-SMALL BUSINESS INVESTMENT COMPANIES Sec. 301. Organization of small business investment companies. Sec. 304. Provision of equity capital for small-business concerns. Sec. 305. Long-term loans to small-business concerns. 1 15 U.S.C. 661. 15 U.S.C. 662. 15 U.S.C. 671. STATEMENT OF POLICY SEC. 102. It is declared to be the policy of the Congress and the purpose of this Act to improve and stimulate the national economy in general and the small-business segment thereof in particular by establishing a program to stimulate and supplement the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply: Provided, however, That this policy shall be carried out in such manner as to insure the maximum participation of private financing sources. It is the intention of the Congress that the provisions of this Act shall be so administered that any financial assistance provided hereunder shall not result in a substantial increase of unemployment in any area of the country. DEFINITIONS SEC. 103. As used in this Act (1) the term "Administration" means the Small Business Administration; (2) the term "Administrator" means the Administrator of the Small Business Administration; (3) the terms "small business investment company","company", and "licensee" mean a company approved by the Administration to operate under the provisions of this Act and issued a license as provided in section 301 (c);5 (4) the term "State" includes the several States, the Territories and possessions of the United States, the Commonwealth of Puerto Rico, and the District of Columbia;" (5) the term "small-business concern" shall have the same meaning as in the Small Business Act; (6) the term "development companies" means enterprises incorporated under State law with the authority to promote and assist the growth and development of small-business concerns in the areas covered by their operations; and (7) the term "license" means a license issued by the Administration as provided in section 301(c).” TITLE II-SMALL BUSINESS INVESTMENT DIVISION OF THE ESTABLISHMENT OF SMALL BUSINESS INVESTMENT DIVISION SEC. 201. There is hereby established in the Small Business Administration a division to be known as the Small Business Investment Division. The Division shall be headed by a Deputy Administrator who shall be appointed by the Administrator, and shall receive compensation at the rate provided by law for other deputy administrators of the Small Business Administration The powers conferred by this Act upon the Administration shall be exercised by the Administration through the Small Business Investment Division, and the powers herein conferred upon the Administrator shall be exercised by him through the Deputy Administrator appointed hereunder. In the performance This new language substituted by sec. 2(1) of Public Law 87-341. Amended by sec. 3 of Public Law 86-502 to reflect admission of Alaska and Hawaii to the Union. of, and with respect to the functions, powers, and duties vested by this Act, the Administrator and the Administration shall (in addition to any authority otherwise vested by this Act) have the functions, powers, and duties set forth in the Small Business Act, and the provisions of sections 13 and 16 of that Act, insofar as applicable, are extended to apply to the functions of the Administrator and the Administration under this Act. [Funds for exercise of functions under this Act authorized in sec. 4(c) of Small Business Act (15 U.S.C. 633(c)). Present authorization for appropriations for these functions is $341,000,000.] TITLE III-SMALL BUSINESS INVESTMENT COMPANIES ORGANIZATION OF SMALL BUSINESS INVESTMENT COMPANIES SEC. 301. (a) A small business investment company shall be an incor- 15 U.S.C. 681. porated body, organized and chartered under State law solely for the purpose of performing the functions and conducting the activities contemplated under this title, which has succession for a period of not less than thirty years unless sooner dissolved by its shareholders and possesses the powers reasonably necessary to perform such functions and conduct such activities. The area in which the company is to conduct its operations, and the establishment of branch offices or agencies (if authorized by the articles of incorporation), shall be subject to the approval of the Administration.8 (b) The articles of incorporation of any small business investment company shall specify in general terms the objects for which the company is formed, the name assumed by such company, the area or areas in which its operations are to be carried on, the place where its principal office is to be located, and the amount and classes of its shares of capital stock. Such articles may contain any other provisions not inconsistent with this Act that the company may see fit to adopt for the regulation of its business and the conduct of its affairs. Such articles and any amendments thereto adopted from time to time shall be subject to the approval of the Administration. (c) The articles of incorporation and amendments thereto shall be forwarded to the Administration for consideration and approval or disapproval. In determining whether to approve such a company's articles of incorporation and permit it to operate under the provisions of this Act, the Administration shall give due regard, among other things, to the need for the financing of small-business concerns in the area in which the proposed company is to commence business, the general character of the proposed management of the company, the number of such companies previously organized in the United States, and the volume of their operations. After consideration of all relevant factors, if it approves the company's articles of incorporation, the Administration may in its discretion approve the company to operate under the provisions of this Act and issue the company a license for such operation.9 CAPITAL STOCK AND SUBORDINATED DEBENTURES SEC. 302. (a) Each company authorized to operate under this Act shall 15 U.S.C. 682. have a paid-in capital and surplus equal to at least $300,000. In order to facilitate the formation and growth of small business investment companies, the Administration is hereby authorized notwithstanding any other provisions of law (but only to the extent that the necessary funds are not available to the New language, contained in sec. 11(a) of Public Law 87-341. New language in second and third sentences substituted by sec. 11(b) (1) and (2) of Public Law 87-341. Previous subsecs. (d) and (e) struck out by sec. 11(b)(3) of Public Law 87-341. 45-500 0-65-2 |