§ 684. Equity capital for small-business concerns

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1958

   Pub. L. 85–699 title III § 304 · 72 Stat. 689

   Enacted · 15 U.S.C. § 684

   Pub. L. 85–699, title III, § 304, Aug. 21, 1958, 72 Stat. 693

   Source evidence

   Code source credit
   Pub. L. 85–699, title III, § 304, Aug. 21, 1958, 72 Stat. 693

   Enacted provision · exact public law section
   Sec. 304. provision of equity capital for small-business concerns (a) It shall be a primary function of each small business investment company to provide a source of needed equity capital for small-business concerns in the manner and subject to the conditions described in this section. (b) Capital shall be provided by a company to a small-business concern under this section only through the purchase of debenture bonds (of such concern) which shall— (1) bear interest at such rate, and contain such other terms, as the company may fix with the approval of the Administration; (2) be callable on any interest payment date, upon three months’ notice, at par plus accrued interest; and (3) be convertible at the option of the company, or a holder in due course, up to and including the effective date of any call by the issuer, into stock of the small-business concern at the sound book value of such stock determined at the time of the issuance of the debentures. (c) Before any capital is provided to a small-business concern under this section— (1) the company may require such concern to refinance any or all of its outstanding indebtedness so that the company is the only holder of any evidence of indebtedness of such concern; and (2) except as provided in regulations issued by the Administration, such concern shall agree that it will not thereafter incur any indebtedness without first securing the approval of the company and giving the company the first opportunity to finance such indebtedness. (d) Whenever a company provides capital to a small-business concern under this section, such concern shall be required to become a stockholder-proprietor of the company by investing in the capital stock of the company, in an amount equal to not less than 2 percent nor more than 5 percent of the amount of the capital so provided, in accordance with regulations prescribed by the Administrator.

2. 1960

   Small Business Investment Act Amendments of 1960

   Pub. L. 86–502 § 6 · 74 Stat. 196

   1. Struck · 15 U.S.C. § 684(a)

      Pub. L. 86–502 struck out “primary” before “function”

   2. Substituted · 15 U.S.C. § 684(a)

      Pub. L. 86–502 substituted “a source of equity capital for incorporated small-business concerns, in such manner and under such terms as the small business investment company may fix in accordance with the regulations of the Administration” for “a source of needed equity capital for small-business concerns in the manner and subject to the conditions described in this section”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 86–502 struck out “primary” before “function”, and substituted “a source of equity capital for incorporated small-business concerns, in such manner and under such terms as the small business investment company may fix in accordance with the regulations of the Administration” for “a source of needed equity capital for small-business concerns in the manner and subject to the conditions described in this section”.

   Enacted provision · exact public law section
   Sec. 6. Section 304 of the Act is amended to read as follows: “Sec. 304. “provision of equity capital for small-business concerns (a) It shall be a function of each small business investment company to provide a source of equity capital for incorporated small-business concerns, in such manner and under such terms as the small business investment company may fix in accordance with the regulations of the Administration. “(b) Before any capital is provided to a small-business concern under this section— “(1) the company may require such concern to refinance any or all of its outstanding indebtedness so that the company is the only holder of any evidence of indebtedness of such concern; and “(2) except as provided in regulations issued by the Administration, such concern shall agree that it will not thereafter incur any indebtedness without first securing the approval of the company and giving the company the first opportunity to finance such indebtedness. “(c) Whenever a company provides capital to a small-business concern under this section, such concern shall have the right, exercisable in whole or in such part as such concern may elect, to become a stockholder-proprietor by investing in the capital stock of the company 5 per centum of the amount of the capital so provided, in accordance with regulations prescribed by the Administrator.”

3. 1960

   Small Business Investment Act Amendments of 1960

   Pub. L. 86–502 § 6 · 74 Stat. 196

   1. Redesignated · 15 U.S.C. § 684(b)

      Pub. L. 86–502 redesignated subsec. (c) as (b)

   2. Repealed · 15 U.S.C. § 684(b)

      Pub. L. 86–502 repealed former subsec. (b) which required capital to be secured only through the purchase of debenture bonds

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 86–502 redesignated subsec. (c) as (b), and repealed former subsec. (b) which required capital to be secured only through the purchase of debenture bonds.

   Enacted provision · exact public law section
   Sec. 6. Section 304 of the Act is amended to read as follows: “Sec. 304. “provision of equity capital for small-business concerns (a) It shall be a function of each small business investment company to provide a source of equity capital for incorporated small-business concerns, in such manner and under such terms as the small business investment company may fix in accordance with the regulations of the Administration. “(b) Before any capital is provided to a small-business concern under this section— “(1) the company may require such concern to refinance any or all of its outstanding indebtedness so that the company is the only holder of any evidence of indebtedness of such concern; and “(2) except as provided in regulations issued by the Administration, such concern shall agree that it will not thereafter incur any indebtedness without first securing the approval of the company and giving the company the first opportunity to finance such indebtedness. “(c) Whenever a company provides capital to a small-business concern under this section, such concern shall have the right, exercisable in whole or in such part as such concern may elect, to become a stockholder-proprietor by investing in the capital stock of the company 5 per centum of the amount of the capital so provided, in accordance with regulations prescribed by the Administrator.”

4. 1960

   Small Business Investment Act Amendments of 1960

   Pub. L. 86–502 § 6 · 74 Stat. 196

   1. Redesignated · 15 U.S.C. § 684(c); 15 U.S.C. § 684(d)

      Pub. L. 86–502 redesignated subsec. (d) as (c)

   2. Redesignated · 15 U.S.C. § 684(c); 15 U.S.C. § 684(d)

      Pub. L. 86–502 substituted “such concern shall have the right, exercisable in whole or in such part as such concern may elect, to become a stockholder-proprietor by investing in the capital stock of the company 5 per centum” for “such concern shall be required to become a stockholder-proprietor of the company by investing in the capital stock of the company, in an amount equal to not less than 2 percent nor more than 5 percent”. Former subsec. (c) redesignated (b)

   Source evidence

   Code amendment note
   Subsecs. (c), (d). Pub. L. 86–502 redesignated subsec. (d) as (c), and substituted “such concern shall have the right, exercisable in whole or in such part as such concern may elect, to become a stockholder-proprietor by investing in the capital stock of the company 5 per centum” for “such concern shall be required to become a stockholder-proprietor of the company by investing in the capital stock of the company, in an amount equal to not less than 2 percent nor more than 5 percent”. Former subsec. (c) redesignated (b).

   Enacted provision · exact public law section
   Sec. 6. Section 304 of the Act is amended to read as follows: “Sec. 304. “provision of equity capital for small-business concerns (a) It shall be a function of each small business investment company to provide a source of equity capital for incorporated small-business concerns, in such manner and under such terms as the small business investment company may fix in accordance with the regulations of the Administration. “(b) Before any capital is provided to a small-business concern under this section— “(1) the company may require such concern to refinance any or all of its outstanding indebtedness so that the company is the only holder of any evidence of indebtedness of such concern; and “(2) except as provided in regulations issued by the Administration, such concern shall agree that it will not thereafter incur any indebtedness without first securing the approval of the company and giving the company the first opportunity to finance such indebtedness. “(c) Whenever a company provides capital to a small-business concern under this section, such concern shall have the right, exercisable in whole or in such part as such concern may elect, to become a stockholder-proprietor by investing in the capital stock of the company 5 per centum of the amount of the capital so provided, in accordance with regulations prescribed by the Administrator.”

5. 1961

   Small Business Investment Act Amendments of 1961

   Pub. L. 87–341 § 5 · 75 Stat. 752

   Added · 15 U.S.C. § 684(d)

   Pub. L. 87–341 added subsec. (d)

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 87–341 added subsec. (d).

   Enacted provision · exact public law section
   Sec. 5. Section 304 of the Small Business Investment Act of 1958 is amended by adding at the end thereof the following new subsection: “(d) Equity capital provided to incorporated small business concerns under this section may be provided directly or in cooperation with other investors, incorporated or unincorporated, through agreements to participate on an immediate basis.”

6. 1967

   Pub. L. 90–104 title II § 206 · 81 Stat. 268

   Repealed · 15 U.S.C. § 684(c)

   Pub. L. 90–104 repealed subsec. (c) which authorized purchase of stock of investment companies by small-business concerns in an amount equal to 5 per centum of capital provided

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 90–104 repealed subsec. (c) which authorized purchase of stock of investment companies by small-business concerns in an amount equal to 5 per centum of capital provided.

   Enacted provision · exact public law section
   Sec. 206. Section 304(c) of the Small Business Investment Act of Repeal. 1958 is repealed.

   Effective date note
   Amendment by Pub. L. 90–104 effective 90 days after Oct. 11, 1967, see section 211 of Pub. L. 90–104, set out as a note under section 681 of this title.

7. 1972

   Small Business Investment Act Amendments of 1972

   Pub. L. 92–595 § 2(e) · 86 Stat. 1314

   Changed · 15 U.S.C. § 684(a)

   Pub. L. 92–595 extended the function of small business investment companies to provide a source of equity capital to unincorporated business concerns

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 92–595 extended the function of small business investment companies to provide a source of equity capital to unincorporated business concerns.

   Enacted provision · exact public law section
   (e) Subsection 304(a) of the Small Business Investment Act of 1958 is amended by inserting “and unincorporated” after “incorporated”.

10 of 10 references resolved to an enrolled provision