JOBS 'Jumpstart our Business Startup' Act
March 27, 2012
A new bill was recently passed by the Senate that will revolutionize the manner in which early stage technology companies obtain funding. The bill has been returned to the House for reconciliation and the hope is it will be presented for signature to the President in the near future. Should the JOBS Act get signed, a new and simpler avenue will be available by means of “Crowd-funding.”
Through crowd-funding, which is the sale of small amounts of stock to many individuals or entities, a company could raise equity through the internet or other means and raise up to $1 million each year.
While the JOBS Act will certainly alleviate many burdens companies currently face, there are a few requirements to be aware of:
- A company using crowd-funding must file with the SEC and include the names of the directors, officers and any shareholder with more than 20 percent of the company’s stock as well as a description of the business and its financial condition.
- A company looking to raise $100,000 or less will need to provide a financial statement certified by a company principal and tax returns.
- A company looking to raise up to $500,000 will need to provide a financial statement that is reviewed by a CPA.
- A company looking to raise more than $500,000 will need to provide a financial statement that is audited by a CPA.
Questions? Please contact your EisnerAmper service professional for more information.