Tag Archives: emerging growth companies

JOBS Act Provides Encouragement for Start-Ups and Emerging Growth Companies

On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act or JOBS Act.  In light of the sharp decline in the number of companies entering the U.S. capital markets through IPOs over the last ten years, Congress recognized a need for this legislation since small companies are critical to economic growth and job creation.  To promote growth and assist small companies in gaining access to capital, the JOBS Act amends the securities laws in several ways, which include the following:

(i)                  Establishes a new category of issuers known as “Emerging Growth Companies” (EGCs) which are issuers that have total annual gross revenues of less than $1 billion (after December 8, 2011).  EGCs  are exempt from certain regulatory requirements until the earliest of the date (a) five years from the date of their IPO, (b) they have $1 billion in annual gross revenue or (c) they become a large accelerated filer (i.e. a company with worldwide public float of $700 million or more);

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