organization of small business investment companies

organization of small business investment companies Sec. 301. (a) Small business investment companies may be formed for the purpose of operating under this Act by any number of persons, not less than 10, who shall subscribe to the articles of incorporation of any such company: Provided, That no such company shall be chartered by the Administration under this section in any State unless the Administration determines that investment companies cannot be chartered under the laws of such State and operate in accordance with the purpose of this Act: Provided further, That no such company shall be chartered by the Administration under this section after June 30, 1961. (b) The articles of incorporation of any small business investment company shall specify in general terms the objects for which the company is formed, the name assumed by such company, the area or areas in which its operations are to be carried on, the place where its principal office is to be located, and the amount and classes of its shares of capital stock. Such articles may contain any other provisions not inconsistent with this Act that the company may see fit to adopt for the regulation of its business and the conduct of its affairs. Such articles and any amendments thereto adopted from time to time shall be subject to the approval of the Administration. (c) The articles of incorporation and amendments thereto shall be forwarded to the Administration for consideration and approval or disapproval. In determining whether to approve the establishment of such a company and its proposed articles of incorporation, the Administration shall give due regard, among other things, to the need for the financing of small-business concerns in the area in which the proposed company is to commence business, the general character of the proposed management of the company, the number of such companies previously organized in the United States, and the volume of their operations. After consideration of all relevant factors, the Administration may in its discretion approve the articles of incorporation and issue a permit to begin business. (d) Upon issuance of such permit, the company shall become and be a body corporate, and as such, and in the name designated in its articles shall have power— (1) to adopt and use a corporate seal; (2) to have succession for a period of thirty years, unless extended as provided in section 308 (f), or unless sooner dissolved by the act of the shareholders owning two-thirds of the stock or by an Act of Congress, or unless its franchise becomes forfeited by some violation of law or regulation issued hereunder; 72 Stat. 692 (3) to make contracts: (4) to sue and be sued, complain, and defend in any court of law or equity; (5) by its board of directors, to appoint such officers and employees as may be deemed proper, define their authority and duties, fix their compensation, require bonds of such of them as it deems advisable and fix the penalty thereof, dismiss such officers or employees, or any thereof, at pleasure, and appoint others to fill their places; (6) to adopt bylaws regulating the manner in which its stock shall be transferred, its officers and employees appointed, its property transferred, and the privileges granted to it by law exercised and enjoyed; (7) to establish branch offices or agencies subject to the approval of the Administration; (8) to acquire, hold, operate, and dispose of any property (real, personal, or mixed) whenever necessary or appropriate to the carrying out of its lawful functions; (9) to act as depository or fiscal agent of the United States when so designated by the Secretary of the Treasury; (10) to operate in such area or areas as may be specified in its articles of incorporation and approved by the Administration; and (11) to exercise the other powers set forth in this Act and such incidental powers as may reasonably be necessary to carry on the business for which the company is established. (e) The board of directors of each small business investment company shall consist of nine members who shall be elected annually by the holders of the shares of stock of the company.