Washington § 31.40.060 - Prohibited loans — Exception.

Full text of Washington Revised Code of Washington § 31.40.060 — Prohibited loans — Exception., with citation guidance and answers to common questions.

§ 31.40.060. Prohibited loans — Exception.

(1) Either by itself or in concert with a director, officer, principal shareholder, or affiliate, or with another licensee, a licensee shall not hold control of a business firm to which it has made a loan under section 7(a) of the federal small business investment act of 1958, 15 U.S.C. Sec. 636(a), except that, to the extent necessary to protect the licensee's interest as creditor of the business firm, a licensee that provides financing assistance to a business firm may acquire and hold control of that business firm. Unless the director approves a longer period, a licensee holding control of a business firm under this section shall divest itself of the interest which constitutes holding control as soon as practicable or within five years after acquiring that interest, whichever is sooner.
(2) For the purposes of subsection (1) of this section, "hold control" means alone or in concert with others:
(a) Ownership, directly or indirectly, of record or beneficially, of voting securities greater than:
(i) For a business firm with outstanding voting securities held by fewer than fifty shareholders, forty percent of the outstanding voting securities;
(ii) For a business firm with outstanding voting securities held by fifty or more shareholders, twenty-five percent of the outstanding voting securities;
(b) Being able to elect or control the election of a majority of the board of directors.
[ 1994 c 92 s 265; 1989 c 212 s 6.]

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Frequently Asked Questions About Washington § 31.40.060

What does Revised Code of Washington § 31.40.060 cover?

Section 31.40.060 ("Prohibited loans — Exception.") is part of the Revised Code of Washington, the codified statutory law of Washington. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.

How do I cite Washington § 31.40.060?

A common citation format is "Revised Code of Washington § 31.40.060" (Washington). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.

Is this the official text of Washington law?

No. This page is for research and education and may not include the most recent amendments. For official current law, check the Washington official source linked on this page or consult a licensed Washington attorney.

How does Washington § 31.40.060 apply to my situation?

Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Washington can advise on how this section applies to you. Contact your state or local bar association for a referral.

Sources & Verification

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