CFR > Title 13 - Business Credit and Assistance > CHAPTER I—SMALL BUSINESS ADMINISTRATION > PART 107—SMALL BUSINESS INVESTMENT COMPANIES > SUBPART G—Financing of Small Businesses by Licensees (§107.700 to §107.900) > 107.800—Financings in the form of Equity Securities.

107.800—Financings in the form of Equity Securities.

(a) You may purchase the Equity Securities of a Small Business. You may not, inadvertently or otherwise:
(1) Become a general partner in any unincorporated business; or
(2) Become jointly or severally liable for any obligations of an unincorporated business.
(b) Definition. Equity Securities means stock of any class in a corporation, stock options, warrants, limited partnership interests in a limited partnership, membership interests in a limited liability company, or joint venture interests. If the Financing agreement contains debt-type acceleration provisions or includes redemption provisions, other than those permitted under § 107.850, the security will be considered a Debt Security for purposes of § 107.855 and § 107.1150(c)(1).

Code of Federal Regulations

[61 FR 3189, Jan. 31, 1996, as amended at 74 FR 33915, July 14, 2009]