§5E-1-13. Restrictions on investment

Published: 2015

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.

‹ Back

 |   Print

WVC 5 E- 1 - 13

§5E-1-13. Restrictions on investment.

(a) No more than thirty percent of the equity raised by a West

Virginia capital company under this article may be invested in any

one West Virginia business.

(b) No portion of the capital base of a West Virginia capital

company may be invested in a business that is the "alter ego" of

that West Virginia capital company. Furthermore, after the

effective date of this article no investments shall be made by a

West Virginia capital company to a business that is an "alter ego"

of the West Virginia capital company: Provided, That this

restriction on investments shall not effect any contracts entered

into prior to the effective date of this article. For purposes of

this subsection, a business is an "alter ego" of the West Virginia

capital company if any one or more of the following criteria are


(1) The ownership of the business is substantially related to

the ownership of the capital company; or

(2) The board of directors of the business is controlled by

the capital company: Provided, That a capital company may control

the board of directors of a business if control consists of no more

than a simple majority of the board.

(c) No owner, director, officer or employee of a West Virginia

capital company may occupy any management position in any business

in which that capital company has invested, unless that person is

filling that management position in an effort to remedy problems arising from a lack of profitability of the business or from

dishonesty of the persons otherwise managing the business.

(d) West Virginia capital companies that are small business

investment companies are not governed by the restrictions described

in subsections (b) and (c) of this section but shall conform the

rules and regulations promulgated by the small business


(e) Each qualified West Virginia capital company may not

invest any of its capital base in any of the following businesses:

(1) Banks;

(2) Savings and loan associations;

(3) Credit companies;

(4) Financial or investment advisors;

(5) Brokerage or financial firms;

(6) Other capital companies;

(7) Charitable and religious institutions;

(8) Conventional oil and gas exploration;

(9) Insurance companies;

(10) Residential housing or development; or

(11) Any other business which the authority determines to be

against the public interest, the purposes of this article or in

violation of any law.

The authority, by the promulgation of rules in accordance with

section five of this article, may designate, in addition to those

listed in this subsection, other businesses in which capital companies may not invest any of their capital base.

Note: WV Code updated with legislation passed through the 2015 Regular Session

The WV Code Online is an unofficial copy of the annotated WV Code, provided as a convenience. It has NOT been edited for publication, and is not in any way official or authoritative.