Sec. 4. Organization of ownership investment companies
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An ownership investment company shall be an incorporated body, a limited liability company, or a limited partnership organized and chartered or otherwise existing under State law solely for the purpose of performing the functions and conducting the activities contemplated under this Act, which— if incorporated, has succession for a period of not fewer than 30 years unless sooner dissolved by its shareholders; or if a limited partnership, has succession for a period of not fewer than 10 years, and possesses the powers reasonably necessary to perform such functions and conduct such activities. The area in which an ownership investment company described in paragraph
(1)is to conduct its operations, and the establishment of branch offices or agencies (if authorized by the articles), shall be subject to the approval of the Department. The articles of any ownership investment company shall specify— the objects for which the company is formed in general terms; the name assumed by the ownership investment company; the area or areas in which the operations of the ownership investment company are to be carried on; the place where the principal office of the ownership investment company is to be located; and the amount and classes of the shares of capital stock of the ownership investment company. Articles of an ownership investment company may contain any other provisions not inconsistent with this Act that the ownership investment company may see fit to adopt for the regulation of the business of the ownership investment company and the conduct of the affairs of the ownership investment company. Articles of an ownership investment company and any amendments thereto adopted from time to time shall be subject to the approval of the Secretary. Each applicant to operate as an ownership investment company (including a Protégé OIC) under this Act shall submit to the Secretary an application, in a form and including such documentation as may be prescribed by the Secretary. The Secretary shall accept applications under subparagraph
(A)on a rolling basis. The Secretary shall allow an applicant under this subsection to electronically submit any document required by this subsection and to provide an electronic signature for any signature that is required on such a document. Not later than 90 days after the initial receipt by the Secretary of an application under this subsection, the Secretary shall provide the applicant with a written report detailing the status of the application and any requirements remaining for completion of the application. Within 90 days after receiving a completed application submitted in accordance with this subsection and in accordance with such requirements as the Secretary may prescribe by regulation, the Secretary shall— approve the application and issue a license for such operation to the applicant if the requirements of this section are satisfied; or disapprove the application and notify the applicant in writing of the disapproval. In reviewing and processing any application under this subsection, the Secretary— shall determine whether— the applicant meets the requirements of subsections
(a)and
(b)of section 6; and the management of the applicant is qualified and has the knowledge, experience, and capability necessary to comply with this Act; shall take into consideration— the need for and availability of financing for a covered business concern in the geographic area in which the applicant is to commence business; the general business reputation of the owners and management of the applicant; and the probability of successful operations of the applicant, including adequate profitability and financial soundness; and shall not take into consideration any projected shortage or unavailability of leverage. Except as provided in clause (ii), an applicant for a license to operate as an ownership investment company shall submit to the Secretary proof that the managers of the applicant have a track record of managing investments, including structured investments, realized or unrealized, in an employee stock ownership plan or eligible worker-owned cooperative. An applicant that does not have an investment track record described in clause
(i)or that is a Protégé OIC shall submit to the Secretary evidence that the applicant has retained or will retain a legal, accounting, or financial advisory firm with not fewer than 5 years of experience in structuring employee stock ownership plans or eligible worker-owned cooperatives. The Secretary may not reject an applicant for a license to operate as an ownership investment company solely because the applicant lacks a sufficient track record in realized investments if the applicant demonstrates an otherwise successful investment track record that includes unrealized covered investments. The Secretary may provide provisional approval for a license to participate in the facility as an ownership investment company (including a Protégé OIC) for a period not to exceed 1 year to an investment firm submitting an application under this subsection or— that does not meet the minimum private capital requirements under section 6(a) necessary for licensing under this subsection at the time of application; that states an intent to more effectively raise capital commitments in private markets with a license; and that states an intent to more precisely request the desired amount of leverage contingent on securing capital from private market investors. An applicant granted provisional approval under clause
(i)shall not be eligible to receive leverage until the applicant satisfies the requirements of section 6(a). The Secretary may prescribe fees to be paid by each applicant for a license to operate as an ownership investment company (including a Protégé OIC) under this Act. Fees collected under this subparagraph— shall be deposited in the account for salaries and expenses of the Department; and are authorized to be appropriated solely to cover the costs of licensing examinations. A 1940 Act Company or 1980 Act Company is eligible to apply for a license under this Act. A licensee that is not registered as a 1940 Act Company or 1980 Act Company is eligible to apply for approval from the Secretary to convert to a 1940 Act Company or 1980 Act Company. A 1940 Act Company or 1980 Act Company that is a licensee may elect to be taxed as a regulated investment company for purposes of section 851 of the Internal Revenue Code of 1986 ( 26 U.S.C. 851 ), provided that the licensee making such election may make distributions only as permitted under the applicable guidance or regulations that the Secretary may prescribe.
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Sec. 4
Organization of ownership investment companies
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