On October 26 the House Committee on Financial Services approved H.R. 2167 (the “Private Company Flexibility and Growth Act”) and sent the Bill to the House floor.
The Bill would amend the Securities Exchange Act of 1934 to change the threshold number of shareholders requiring registration under the Exchange Act to 1,000 holders of record. Excluded from the definition of holders of record will be securities held by persons who receive the securities pursuant to an employee compensation plan in transactions exempted from the registration requirements of section 5 of the Securities Act of 1933.
Under current law a private company is required to register under the Exchange Act if, among other things, its securities are held of record by more than 500 persons. According to published reports, no corresponding legislation has as yet been introduced in the Senate.
To view the Bill, click here.