On Tuesday, March 27, 2012, the House is expected to consider a motion to concur in the Senate amendment to the Jumpstart Our Business Startups (JOBS) Act under a suspension of the rules, requiring a two-thirds majority vote for passage. The originial bill was introduced by Rep. Stephen Fincher (R-TN) and was referred to the Committee on Financial Services. The bill was approved by the House on March 8, 2012, by a recorded vote of 390-23. The Senate approved an amended version of the bill on March 22, 2012, by a recorded vote of 73-26.
The Senate amendment replaced Title III of the House-passed bill with a similar measure that would provide for online funding for startup companies while instituting strong protections for investors.
The bill would allow companies to raise up to $1,000,000 annually through “crowdfunding” on registered internet websites. (The House bill would have allowed companies to raise up to $2,000,000) The bill would also implement basic marketplace protections for the ordinary investors seeking to take advantage of this new form of capital raising. Web sites seeking to list companies would be required to register with the relevant financial regulators and provide investors the basic information about the companies they list, and “crowdfunding” companies themselves would be required to provide basic disclosures to investors and regulators.
Under the Senate version of the bill, companies seeking between $100,000 and $500,000 in capital would be required have financial statements reviewed by an independent public accountants. Additionally, audited financial statements would be required for companies seeking more than $500,000 in capital.