Section 135.500

Title X TAXATION AND REVENUE

Chapter 135

Effective - 28 Nov 2007, 2 histories, see footnote   

  135.500.  Title of law — definitions. — 1.  Sections 135.500 to 135.529 shall be known and may be cited as the "Missouri Certified Capital Company Law".

  2.  As used in sections 135.500 to 135.529, the following terms mean:

  (1)  "Affiliate of a certified company":

  (a)  Any person, directly or indirectly owning, controlling or holding power to vote ten percent or more of the outstanding voting securities or other ownership interests of the Missouri certified capital company;

  (b)  Any person ten percent or more of whose outstanding voting securities or other ownership interest are directly or indirectly owned, controlled or held with power to vote by the Missouri certified capital company;

  (c)  Any person directly or indirectly controlling, controlled by, or under common control with the Missouri certified capital company;

  (d)  A partnership in which the Missouri certified capital company is a general partner;

  (e)  Any person who is an officer, director or agent of the Missouri certified capital company or an immediate family member of such officer, director or agent;

  (2)  "Applicable percentage", one hundred percent;

  (3)  "Capital in a qualified Missouri business", any debt, equity or hybrid security, of any nature and description whatsoever, including a debt instrument or security which has the characteristics of debt but which provides for conversion into equity or equity participation instruments such as options or warrants which are acquired by a Missouri certified capital company or a qualified investing entity as a result of a transfer of cash to a business;

  (4)  "Certified capital", an investment of cash by an investor in a Missouri certified capital company;

  (5)  "Certified capital company", any partnership, corporation, trust or limited liability company, whether organized on a profit or not-for-profit basis, that is located, headquartered and registered to conduct business in Missouri that has as its primary business activity, the investment of cash in qualified Missouri businesses, and which is certified by the department as meeting the criteria of sections 135.500 to 135.529;

  (6)  "Department", the Missouri department of economic development;

  (7)  "Director", the director of the department of economic development or a person acting under the supervision of the director;

  (8)  "Investor", any insurance company that contributes cash;

  (9)  "Liquidating distribution", payments to investors or to the certified capital company from earnings;

  (10)  "Person", any natural person or entity, including a corporation, general or limited partnership, trust, limited liability company, or any charitable organization which is exempt from federal income tax and whose Missouri unrelated business taxable income, if any, would be subject to the state income tax imposed under chapter 143;

  (11)  "Qualified distribution", any distribution or payment to equity holders of a certified capital company in connection with the following:

  (a)  Reasonable costs and expenses of forming, syndicating, managing and operating the certified capital company;

  (b)  Management fees for managing and operating the certified capital company; and

  (c)  Any increase in federal or state taxes, penalties and interest, including those related to state and federal income taxes, of equity owners of a certified capital company which related to the ownership, management or operation of a certified capital company;

  (12)  "Qualified investing entity", any partnership, corporation, trust, or limited liability company, whether organized on a for-profit or not-for-profit basis, that:

  (a)  Is registered to do business in this state;

  (b)  Is a wholly owned subsidiary of a certified capital company or otherwise affiliated with and under common control with a certified capital company; and

  (c)  Has been designated as a qualified investing entity by such certified capital company.  Such designation shall be effective upon delivery by the certified capital company of written notice of the designation to the department.  A qualified investing entity may raise debt or equity capital for investment, but such capital shall not be considered certified capital.  Any qualified investment made by a qualified investing entity after the effective date of this act shall be deemed to have been made by a certified capital company that designated the qualified investing entity as such; provided that no qualified investment may be deemed to have been made by more than one certified capital company;

  (13)  "Qualified investment", the investment of cash by a Missouri certified capital company or a qualified investing entity in such a manner as to acquire capital in a qualified Missouri business;

  (14)  "Qualified Missouri business", an independently owned and operated business, which is headquartered and located in Missouri and which is in need of venture capital and cannot obtain conventional financing.  Such business shall have no more than two hundred employees, eighty percent of which are employed in Missouri.  Such business shall be involved in commerce for the purpose of manufacturing, processing or assembling products, conducting research and development, or providing services in interstate commerce, but excluding retail, real estate, real estate development, insurance and professional services provided by accountants, lawyers or physicians.  At the time a certified capital company or qualified investing entity makes an initial investment in a business, such business shall be a small business concern that meets the requirements of the United States Small Business Administration's qualification size standards for its venture capital program, as defined in Section 13 CFR 121.301(c) of the Small Business Investment Act of 1958, as amended.  Any business which is classified as a qualified Missouri business at the time of the first investment in such business by a Missouri certified capital company or qualified investing entity shall, for a period of seven years from the date of such first investment, remain classified as a qualified Missouri business and may receive follow-on investments from any Missouri certified capital company or qualified investing entity and such follow-on investments shall be qualified investments even though such business may not meet the other qualifications of this subsection at the time of such follow-on investments;

  (15)  "State premium tax liability", any liability incurred by an insurance company pursuant to the provisions of section 148.320, 148.340, 148.370 or 148.376, and any other related provisions, which may impose a tax upon the premium income of insurance companies after January 1, 1997.

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(L. 1996 H.B. 1237, A.L. 1997 2d Ex. Sess. S.B. 1, A.L. 2003 H.B. 289, A.L. 2007 1st Ex. Sess H.B. 1)

Effective 11-28-07