WEST VIRGINIA CODE
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:
(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
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