http://www.entrepreneur.com/article/223026
If Republicans and Democrats continue to work together a promising JOBS act known as Jumpstart Our Business Startups includes six key legislative changes that could greatly improve the entrepreneurial spirit of America. It is interesting that this act is labeled as making small business start-ups easier, however the proposed legislation seems to simply make it easier for companies to go public. Not that this is a good or bad thing, it just seems that these six legislative changes are designed by the big business minded and intended to support shareholders not stimulate job growth.
1. The Reopening American Capital Markets to Emerging Growth Companies Act would make it easier for companies to go public by allowing them temporary relief from certain U.S. Securities and Exchange Commission (SEC) regulations.
2. The Access to Capital for Job Creators Act aims to help small companies raise capital by removing a SEC regulatory ban that says small businesses cannot use advertisements to attract investors.
3. The Entrepreneur Access to Credit Act also claims to ease entrepreneurs' efforts to raise capital by eliminating SEC restriction on “crowdfunding,” an increasingly popular way for small business to raise money from a large pool of individual investors.
4. The Small Company Capital Formation Act would help small businesses go public by elevating the threshold of companies that are exempted from SEC regulation to $50 million from $5 million.
5. The Private Company Flexibility and Growth Act is expected to give small companies more room to grow before having to go public by expanding the shareholder limit for registration with the SEC to 1,000 from 500. The current SEC regulation asks many small companies to purposefully impede their own growth or force them to look for buyers when they start hitting up against the current regulatory roof.
6. The Capital Expansion Act would increase the number of shareholders allowed to invest in a community bank to 2,000 from 500, as is currently dictated by the SEC. The goal is to reduce regulation that community banks, some of the biggest lenders to smaller businesses, have to deal with allowing them to spend more time making loans.
3 comments:
I disagree; by making it easier to invest in these companies it will help small businesses expand, creating more jobs.
It is far easier to raise capital as a public company than as a private company. Most of these proposed changes address this issue, and would seem to be logical, since SEC regulations and restrictions are extremely expensive, and can even be prohibitively expensive for smaller or less-established companies. However, regulatory agencies exist for a reason, and I wonder if this regulation would result in an uptick in materially misstated or fraudulent filings, which may result in dramatic investor losses and even increased legal action.
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