Letter Regarding S. 1824, the “Private Company Flexibility and Growth Act”
The Honorable Patrick Toomey The Honorable Thomas Carper
United States Senate United States Senate
Washington, DC 20510 Washington, DC 20510
Dear Senator Toomey and Senator Carper:
The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector and region, thanks you for sponsoring S. 1824, the “Private Company Flexibility and Growth Act,” which would raise privately held companies’ shareholder threshold for registration with the Securities and Exchange Commission. This legislation would enhance capital formation for privately held companies in all sectors of the economy, allowing for greater expansion and creation of new jobs.
The Chamber recently released a study, Sources of Capital and Economic Growth that demonstrates the variety of capital sources needed by firms of all sizes in a free enterprise economy. Companies, small and large, particularly new businesses, need a mix of capital sources to meet short-term and long-term growth needs. This diversity of capital has provided the liquidity needed for different sized firms to be able to have the opportunity to achieve success.
S. 1824 would give small, privately held companies additional flexibility to access various forms of capital formation without being burdened with onerous registration and reporting requirements. This bill would raise the Exchange Act’s cap on the number of shareholders from 499 to 2,000 and exempt employees who received securities pursuant to an employee compensation plan from being included in the cap. The Chamber believes that this important legislation is appropriately targeted to businesses in all sectors of the economy and would increase their ability to raise capital from a larger base of shareholders. Furthermore, this legislation would provide an employee exemption so that businesses can reward employees with an ownership stake in the company without being disadvantaged when capital formation is necessary.
The Chamber strongly supports S. 1824, and looks forward to working with you on this important issue.
Sincerely,
R. Bruce Josten
