Written by Louis A. Bevilacqua, Joseph R. Tiano, Jr., David S. Baxter, Ali Panjwani and K. Brian Joe
This article summarizes various legislation introduced in Congress that would make it easier for smaller companies to raise capital and would lessen the regulatory burden on those companies.
Legislators have introduced eight different proposals in Congress to make it easier for smaller companies to raise money and lessen the regulatory burden on those companies. These proposed acts are the following:
H.R. 1070 – Small Company Capital Formation Act of 2011
S. 1544 – Small Company Capital Formation Act of 2011
H.R. 2930 – Entrepreneur Access to Capital Act
S. 1791 – Democratizing Access to Capital Act
S. 1970 – Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2011 or the Crowdfund Act
H.R. 2940 – Access to Capital for Job Creators Act
S. 1933 – Reopening American Capital Markets to Emerging Growth Companies Act of 2011
H.R. 2167 – Private Company Flexibility and Growth Act
Two of these proposed acts already have passed through the House of Representatives: H.R. 1070 (Small Company Capital Formation Act of 2011), which passed through the House on November 2, 2011 by a vote of 421 to 1, and H.R. 2930 (Entrepreneur Access to Capital Act), which passed through the House on November 3, 2011 by a vote of 407 to 17. The overwhelming support by representatives in the House for these proposed acts is a very positive sign. Versions of these two proposed acts are now navigating their way through the Senate. The remaining legislative initiatives remain under debate in the House or the Senate and have not been passed by either chamber.
This article summarizes all of these proposed acts. Appendix A to this article is a chart that summarizes the major provisions of these proposed acts, and Appendix B to this article is a chart that compares the proposed “crowdfunding” acts described in more detail below.