Te read Part One of this article: Click Here.
Back in December of last year we published a short article about Crowdfunding; well the JOBS (Jumpstart Our Business Startups) Act has passed both the House and the Senate and clears the way to “crowdfunding” as a method to raise business capital. The bill originally passed in the US House in November by a 407-17 vote, and new version was more recently approved by the Senate, 73-26. The House approved the revised Senate measure, 380-41. It now awaits the President’s signature. The President has indicated that he will sign the Bill.
The Bill enables companies to raise up to $1 million a year through crowdfunding (or $2 million if the company provides prospective investors with audited financial statements).
Some the specifics: investors with incomes or net worth of less than $100,000 can invest up to $2,000 or 5% of their annual income (whichever is greater) in a company; and those with incomes or net worth greater than $100,000 or qualifying investors may invest 10% of either their net worth or income, up to $100,000.
Private companies would be able to have as many as 1,000 shareholders, up from the current cap of 500. This may still become an alternative way to fund your start-up company.
If you have any questions or would like additional information on this issue or other corporate challenges, please contact Paul D. Creme.
Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at [email protected].