§2009cc–8 Rural Business Investment Companies

Summary

Rural business investment companies must be set up as a corporation, a limited liability company, or a limited partnership under State law and exist only to do the work allowed by this program. Corporations must plan to last at least 30 years unless shareholders end them sooner. limited partnerships and LLCs must plan to last at least 10 years. They must have the powers needed to carry out their work. The company’s founding papers must name its purpose, its name, where it will operate, where its main office will be, and its capital share structure, and the Secretary must approve them. Each company needs at least $5,000,000 in private capital, or $10,000,000 if it will issue participating securities the Secretary might buy or guarantee. The Secretary can allow an amount between $5,000,000 and $10,000,000 for special reasons if it won’t create unreasonable risk. Companies get 2 years to meet the capital rules. The Secretary will also check that capital is enough for sound, profitable management, that at least 75 percent goes to rural businesses, no more than 10 percent goes to an area with a city over 150,000 in the last decennial census and its urbanized area, short-term non-equity deals are under 5 years only to protect existing investments, and that management is mostly independent from owners for licenses after May 13, 2002.