A jump-start for small businesses?
A jump-start for small businesses?
The U.S. House of Representatives overwhelmingly passed a bill this morning aimed at making it easier for small companies to grow and go public, CNNMoney reported.
The House voted 390-23 to pass the bill, which would ease certain rules that the Securities and Exchange Commission (SEC) enforces on small companies going through the process of becoming a publicly traded company. The Senate is working on a similar version of the bill, and President Barack Obama has indicated he supports it.
Named the Jumpstart Our Business Startups Act, the package is en route to becoming one of the few pieces of legislation aimed at boosting job creation and the economy to be signed into law in the past few years. Republicans have been referring to it as the JOBS Act, the same acronym as a different and more ambitious White House initiative aimed at spurring jobs.
The bill would relax SEC rules on small and medium-sized companies with less than a billion dollars in gross revenues that go public, putting new rules into effect over five years instead of all at once. After five years, or if the company’s gross revenues exceed $1 billion, the company would have to abide by SEC deadlines and rules.
It would also allow small companies to advertise and solicit investors when going public, which is currently prohibited. And it would allow them to raise more money from larger numbers of small, less sophisticated investors.
The bill isn’t without critics. Union groups, consumer advocate groups and advocates for retired people have written to lawmakers saying they’re concerned that parts of the measure may strip valuable protections for those looking to invest in initial public offerings, or IPOs.
The U.S. House of Representatives overwhelmingly passed a bill this morning aimed at making it easier for small companies to grow and go public, CNNMoney reported.
The House voted 390-23 to pass the bill, which would ease certain rules that the Securities and Exchange Commission (SEC) enforces on small companies going through the process of becoming a publicly traded company. The Senate is working on a similar version of the bill, and President Barack Obama has indicated he supports it.
Named the Jumpstart Our Business Startups Act, the package is en route to becoming one of the few pieces of legislation aimed at boosting job creation and the economy to be signed into law in the past few years. Republicans have been referring to it as the JOBS Act, the same acronym as a different and more ambitious White House initiative aimed at spurring jobs.
The bill would relax SEC rules on small and medium-sized companies with less than a billion dollars in gross revenues that go public, putting new rules into effect over five years instead of all at once. After five years, or if the company’s gross revenues exceed $1 billion, the company would have to abide by SEC deadlines and rules.
It would also allow small companies to advertise and solicit investors when going public, which is currently prohibited. And it would allow them to raise more money from larger numbers of small, less sophisticated investors.
The bill isn’t without critics. Union groups, consumer advocate groups and advocates for retired people have written to lawmakers saying they’re concerned that parts of the measure may strip valuable protections for those looking to invest in initial public offerings, or IPOs.
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