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Cmte Financial Services (R)
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H.R. 2167, the Private Company Flexibility and Growth Act

Washington, Oct 7 -

H.R. 2167, introduced by Rep. David Schweikert, removes an impediment to capital formation for small companies by raising the shareholder threshold for mandatory registration with the SEC from 500 to 1,000 shareholders.  The shareholder threshold was originally adopted in 1964 and has not been modernized since then.  At a recent hearing, the Committee received testimony from witnesses regarding the impact the bill will have on the availability of credit for small companies, job creation, and economic growth.

Upon approval by the Capital Markets and Government Sponsored Enterprises Subcommittee, Rep. Schweikert said: “I am excited that the subcommittee has passed this bi-partisan bill that unwinds red-tape on small businesses and allows for growth and job creation. Currently, many small businesses are forced to file as a public company due to an obscure 1964 regulation that requires companies with 499 shareholders and $10 million in assets to file with the SEC. This regulation severely limits the growth stages for companies, which need time and flexibility to develop. I introduced this bill because burdensome regulation cannot grow the economy nor can it create jobs. H.R. 2167 will help entrepreneurs grow their business, remain competitive, and create jobs.”

The legislation was approved by the Subcommittee on October 5th by a voice vote.