Kentucky Statutes 154.20-283 – Prohibition against certain qualified investments and financial interests — Investment fund manager’s limitations on holding management positions in small businesses in which investment fund has invested
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(1) No qualified investments shall be made in a small business that is the “alter ego” of the investment fund or the investment fund manager. For purposes of this subsection, a business is an “alter ego” of an investment fund or an investment fund manager if any of the following criteria are satisfied:
(a) Prior to an investment fund making a qualified investment in the small business, the small business is owned in whole or in an amount greater than twenty percent (20%) of the small business by an investor, officer, director, partner, member, manager, trustee or employee of the investment fund or the investment fund manager; or
(b) The small business employs on a full-time or part-time basis an investor.
(2) An investment fund manager may occupy any management position in any small business in which that investment fund has made a qualified investment for the purpose of:
(a) Filling a management position in an effort to remedy problems arising from a lack of profitability of the small business, or from dishonesty of the persons otherwise managing the small business; or
(b) Serving in a management position in the small business in order to add value to the investment fund and the business by his or her experience, skills, or relationships to help a business succeed.
(3) No officer, member, or employee of the authority shall have a direct or indirect financial interest in any investment fund or investment fund manager.
Effective: July 15, 2002
History: Amended 2002 Ky. Acts ch. 230, sec. 28, effective July 15, 2002. — Created
1998 Ky. Acts ch. 414, sec. 14, effective July 15, 1998.
(a) Prior to an investment fund making a qualified investment in the small business, the small business is owned in whole or in an amount greater than twenty percent (20%) of the small business by an investor, officer, director, partner, member, manager, trustee or employee of the investment fund or the investment fund manager; or
Terms Used In Kentucky Statutes 154.20-283
- Authority: means the Kentucky Economic Development Finance Authority, consisting of a committee as set forth in KRS §. See Kentucky Statutes 154.1-010
- Trustee: A person or institution holding and administering property in trust.
(b) The small business employs on a full-time or part-time basis an investor.
(2) An investment fund manager may occupy any management position in any small business in which that investment fund has made a qualified investment for the purpose of:
(a) Filling a management position in an effort to remedy problems arising from a lack of profitability of the small business, or from dishonesty of the persons otherwise managing the small business; or
(b) Serving in a management position in the small business in order to add value to the investment fund and the business by his or her experience, skills, or relationships to help a business succeed.
(3) No officer, member, or employee of the authority shall have a direct or indirect financial interest in any investment fund or investment fund manager.
Effective: July 15, 2002
History: Amended 2002 Ky. Acts ch. 230, sec. 28, effective July 15, 2002. — Created
1998 Ky. Acts ch. 414, sec. 14, effective July 15, 1998.