Iowa Code 533.304 – Investment in certain shares or equity interests
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1. For purposes of this section, unless the context otherwise requires:
a. “Equity interests” means limited partnership interests and other equity investments in which liability is limited to the amount of the investment, but does not mean general partnership interests or other interests involving general liability.
b. “Small business” means a corporation, partnership, proprietorship, or other entity formed under the laws of the United States, or a state, district, or territory of the United States, that meets the appropriate United States small business administration definition of small business and that is principally engaged in the development or exploitation of inventions, technological improvements, new processes, or other products not previously generally available in this state, or other investments which provide an economic benefit to this state.
c. “Venture capital fund” means a corporation, partnership, proprietorship, or other entity formed under the laws of the United States, or a state, district, or territory of the United States, whose principal business is or will be the making of investments in and the provision of significant managerial assistance to small businesses that meet the United States small business administration definition of small business.
Terms Used In Iowa Code 533.304
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- credit union: is a lso a "supervised financial organization" as that term is defined and used in chapter 537, the Iowa consumer credit code. See Iowa Code 533.102
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
- State credit union: means a credit union organized pursuant to section 533. See Iowa Code 533.102
- United States: includes all the states. See Iowa Code 4.1
2. A state credit union may invest in either of the following to the extent that the total investments under this section shall not be more than five percent of the state credit union‘s assets:
a. Shares or equity interests in venture capital funds that agree to invest an amount equal to at least fifty percent of the state credit union’s investment in small businesses having their principal offices within this state and having either more than one-half of their assets within this state or more than one-half of their employees employed within this state.
b. Shares or equity interests in small businesses having their principal offices within this state and having either more than one-half of their assets within this state or more than one-half of their employees employed within this state. A state credit union shall not invest in more than twenty percent of the total capital and surplus of any one small business under this paragraph.