House to Unveil Jobs MeasuresFebruary 29, 2012
On Tuesday, House Majority Leader Eric Cantor introduced the Jumpstart Our Business Startups Act (JOBS Act), which would, if enacted, help to promote and facilitate entrepreneurship and new business formation at a time when economic growth and job creation remain a top priority for our country.
The JOBS Act is actually a combination of six different bipartisan bills that have already been passed or approved by the House or the House Financial Services Committee. The bills listed below are included in the JOBS Act.
- The Small Company Capital Formation Act of 2011 (H.R. 1070) passed the House by a margin of 421-1. This bill would, among other things, effectively amend Regulation A by increasing the aggregate offering amount of all securities sold within the prior 12-month period from $5 million to $50 million.
- The Entrepreneur Access to Capital Act (H.R. 2930) passed the House by a margin of 413-11. This measure would create a so-called crowdfunding exemption that would, if audited financial statements are provided to investors, allow a company to raise up to $2 million provided that the aggregate amount sold to any investor in a 12-month period does not exceed the lesser of $10,000 or 10 percent of such investor’s annual income.
- The Access to Capital for Job Creators Act (H.R. 2940) passed the House by a margin of 413-11. This bill would allow for general solicitation or general advertising to find investors, provided that all purchasers of the securities are accredited investors.
- The Private Company Flexibility and Growth Act (H.R. 2167) was approved by the House Financial Services Committee by voice vote in October 2011. This bill would raise the shareholder threshold for mandatory registration under the Securities Exchange Act of 1934 from 500 to 1000 shareholders.
- The Reopening American Capital Markets to Emerging Growth Companies Act (H.R. 3606) was approved by the House Financial Services Committee on Feb. 16, 2012 by a vote of 54-1. This bill would make it easier for small and medium-sized companies to raise money through capital markets by reducing costs associated with going public and phasing in certain regulatory obligations over time.
- The Capital Expansion Act (H.R. 4088), a modified version of H.R. 1965, which passed the House by a margin of 420-2. This bill would amend the securities laws and raise the threshold for mandatory shareholder registration from 500 to 2,000 shareholders for all banks and bank holding companies. This bill would also amend U.S. securities laws to raise the deregistration threshold from 300 to 1,200 shareholders.
The JOBS Act, if enacted, would positively transform the ability of small businesses to raise capital and help alleviate the disproportionate burden of compliance placed on small firms.