House Republicans are promoting six bills aimed at helping small business owners. Called JOBS (Jumpstart Our Business Startups) the bills encourage small shareholders to supply capital to startup and growing businesses. What the bills do:
- Increase from 500 to 1,000, the number of shareholders a company can have before going public. This allows companies to raise more money.
- Create “emerging growth” companies that do not have to comply with SEC rules until they grow larger. This allows companies to raise money before they enter the complex world of stock offerings.
- Allow firms to advertise for investors. The SEC now bans this.
- Let companies raise $50 million without SEC regulation. The current limit is $5 million.
- Increases the number of shareholders who can invest in a community bank from 500 to 2,000.
Observers say the bills do not create jobs. Supporters say raising capital without following complex SEC regulations will make it easier to raise more money faster.
The House has already approved three of the six bills. House committees approved two more. The community bank bill awaits approval
The bills are bipartisan and have passed with large majorities. Minority leader Nancy Pelosi says they are “the path of least resistance…it is not any substitute for the jobs bill that we need.”
The bills are likely to be approved in the Senate said the Senate Majority Leader. The President has indicated he would sign them.