Tennessee § 45-8-212 - Control of business firms.

§ 45-8-212. Control of business firms.

One (1) or more other licensees, or one (1) or more directors, officers, principal shareholders, or affiliates of another licensee or licensees, either by itself or in concert with one (1) or more of its directors, officers, principal shareholders, or affiliates, shall not hold control of a business firm, except as follows: If and to the extent necessary to protect the interests of a licensee as a creditor of, or investor in, a business firm, a licensee that has provided financing assistance to a business firm may acquire and hold control of the business firm. Unless the commissioner approves a longer period, a licensee holding control of a business firm under this subdivision (a)(1) shall divest itself of the interest that constitutes holding control as soon as practicable or within three (3) years after acquiring the interest, whichever is earlier; With the approval of the commissioner, a licensee may acquire and hold control of a corporation that is licensed as a small business investment company under the United States Small Business Investment Act of 1958, (15 U.S.C. § 661 et seq.), as amended; With the approval of the commissioner, a licensee may acquire and hold control of a company that is a development company, whether or not the development company has been or may become certified by the United States small business administration pursuant to the United States Small Business Investment Act of 1958; With the approval of the commissioner, a licensee may acquire and hold control of another business firm that is engaged in no business other than the business of providing financing assistance or management assistance to business firms; and With the approval of the commissioner, a licensee may acquire and hold control of a business firm not referred to in subdivisions (a)(1)-(4). The commissioner shall not approve an application under this subdivision (a)(5) unless the commissioner determines that the acquisition will promote the purposes of this part. If a licensee anticipates acquiring and holding control of a business firm under subdivision (a)(1), the licensee shall file with the commissioner a plan for acquiring and holding control of the business firm, which shall include, at a minimum, the following: The reasons it is necessary for the licensee to acquire and hold control of the business firm; The percentage of outstanding voting securities of the business firm that the licensee anticipates acquiring and holding; The licensee's proposed course of action upon obtaining control of the business firm; and The length of time the licensee anticipates it will be necessary to hold control of the business firm. The commissioner may require a licensee to demonstrate the necessity for the licensee to hold control of a business firm under subdivision (a)(1). For the purposes of this section, “hold control” means ownership, directly or indirectly, of record or beneficially, of voting securities greater than: For a business firm with outstanding voting securities held by fewer than fifty (50) shareholders, forty percent (40%) of the outstanding voting securities; and For a business firm with outstanding voting securities held by fifty (50) or more shareholders, twenty-five percent (25%) of the outstanding voting securities. Acts 1989, ch. 124, § 12. Compiler's Notes. The United States Small Business Investment Act of 1958, referred to in this section, is primarily codified in 15 U.S.C. § 631 et seq., and also in 12 U.S.C. § 371 .