Browse Definitions:
Definition

JOBS Act (Jumpstart Our Business Startups Act)

Contributor(s): Ivy Wigmore

The JOBS Act (Jumpstart Our Business Startups Act) is legislation that eases regulatory restrictions for new businesses to make it easier for startups to get established. 

The intention of the Act is to encourage more business startups, foster their success, and as a result, create more jobs and stimulate the economy. As stated in the bill, which passed as H.R. 3606, the purpose is “to increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies.”

The main provisions of the JOBS Act:

  • Businesses are not required to register their common stock with the SEC (Securities Exchange Commission) until they have 500 unaccredited shareholders or a total of 2,000 accredited and unaccredited shareholders. Previously, that requirement went into effect when a business had a total of 500 shareholders of record. A non-accredited investor is one that does not meet the SEC’s standard for accreditation: A net worth of $1 million and an annual income of $200,000, or $300,000 in combination with a spouse’s income. This provision allows a startup to collect smaller sums of money from a larger pool of investors.
  • Certain types of small initial public offerings (IPO) are no longer required to register with the SEC. Restrictions are loosened on government-registered Internet-based “funding portals.” This provision was created to enable crowdfunding. Conditions include a limit on the amount an investor can contribute, up to the lesser of either 10 percent of income or $10,000.
  • Emerging growth companies are not bound by some regulatory and disclosure requirements – in particular, some stipulations of Section 404 of the Sarbanes-Oxley Act -- in their initial public filing and for a period of five years after that, up from two. SOX Section 404 mandates that all publicly-traded companies must establish internal controls and procedures for financial reporting and must document, test and maintain those controls and procedures to ensure their effectiveness.
  • Small businesses are now allowed to advertise seeking investors.
  • Companies can raise $50 million in share sales, up from a $5 million limit, before being required to register with the SEC, to enable more fundraising under less complex regulation.
  • Community banks are permitted to have 2,000 shareholders, up from 500.

 

The JOBS Act was signed into effect by President Barack Obama on April 5, 2012.

This was last updated in June 2012

Continue Reading About JOBS Act (Jumpstart Our Business Startups Act)

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • risk map (risk heat map)

    A risk map, also known as a risk heat map, is a data visualization tool for communicating specific risks an organization faces.

  • internal audit (IA)

    An internal audit (IA) is an organizational initiative to monitor and analyze its own business operations in order to determine ...

  • pure risk (absolute risk)

    Pure risk, also called absolute risk, is a category of threat that is beyond human control and has only one possible outcome if ...

SearchSecurity

  • FIDO (Fast Identity Online)

    FIDO (Fast ID Online) is a set of technology-agnostic security specifications for strong authentication. FIDO is developed by the...

  • cryptanalysis

    Cryptanalysis is the study of ciphertext, ciphers and cryptosystems with the aim of understanding how they work and finding and ...

  • Trojan horse (computing)

    In computing, a Trojan horse is a program that appears harmless, but is, in fact, malicious.

SearchHealthIT

SearchDisasterRecovery

  • business continuity and disaster recovery (BCDR)

    Business continuity and disaster recovery (BCDR) are closely related practices that describe an organization's preparation for ...

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • call tree

    A call tree -- sometimes referred to as a phone tree -- is a telecommunications chain for notifying specific individuals of an ...

SearchStorage

  • cloud SLA (cloud service-level agreement)

    A cloud SLA (cloud service-level agreement) is an agreement between a cloud service provider and a customer that ensures a ...

  • wear leveling

    Wear leveling is a process that is designed to extend the life of solid-state storage devices.

  • storage area network (SAN)

    A storage area network (SAN) is a dedicated high-speed network or subnetwork that interconnects and presents shared pools of ...

SearchSolidStateStorage

  • hybrid hard disk drive (HDD)

    A hybrid hard disk drive is an electromechanical spinning hard disk that contains some amount of NAND Flash memory.

Close