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House Bill would Raise 500 Shareholder Threshold for Public Company Registration to 1,000 & Exclude Accredited Investors from Count
In June, 2011, a bill was introduced in the House would raise the 500-shareholder threshold for becoming an SEC registered reporting company to 1000 and exclude accredited investors and employees.
The bill, HR 2167 has been referred to the House Financial Services Committee for review. This means the bill is in the first step in the legislative process. “Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate. The majority of bills and resolutions never make it out of committee,” according to the legislative tracking service, SEC Reviewing 500 Shareholder
According to an announcement made in May, 2011, the U.S. Securities and Exchange Commission (“SEC”) is reviewing the current 500 shareholder threshold for private companies with $10 Million or more in assets, at and beyond which they must register as a public company under the Securities Exchange Act of 1934.
The announcement was made by SEC Chairman Mary Schapiro in testimony at a hearing on “the Future of Capital Formation” before the U.S. House of Representatives Committee on Oversight and Government Reform on May 10, 2011. Here is a Bloomberg News, the catalyst for the review may have been
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