[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR125.9]



[Page 439]

 

                TITLE 13--BUSINESS CREDIT AND ASSISTANCE

 

                CHAPTER I--SMALL BUSINESS ADMINISTRATION

 

PART 125_GOVERNMENT CONTRACTING PROGRAMS--Table of Contents

 

       Subpart B_Eligibility Requirements for the SDVO SBC Program

 

Sec. 125.9  Who does SBA consider to own an SDVO SBC?



    Source: 69 FR 25267, May 5, 2004, unless otherwise noted.





    A concern must be at least 51% unconditionally and directly owned by 

one or more service-disabled veterans. More specifically:

    (a) Ownership must be direct. Ownership by one or more service 

disabled veterans must be direct ownership. A concern owned principally 

by another business entity that is in turn owned and controlled by one 

or more service-disabled veterans does not meet this requirement. 

Ownership by a trust, such as a living trust, may be treated as the 

functional equivalent of ownership by service-disabled veterans where 

the trust is revocable, and service-disabled veterans are the grantors, 

trustees, and the current beneficiaries of the trust.

    (b) Ownership of a partnership. In the case of a concern which is a 

partnership, at least 51% of every class of partnership interest must be 

unconditionally owned by one or more service-disabled veterans. The 

ownership must be reflected in the concern's partnership agreement.

    (c) Ownership of a limited liability company. In the case of a 

concern which is a limited liability company, at least 51% of each class 

of member interest must be unconditionally owned by one or more service-

disabled veterans.

    (d) Ownership of a corporation. In the case of a concern which is a 

corporation, at least 51% of the aggregate of all stock outstanding and 

at least 51% of each class of voting stock outstanding must be 

unconditionally owned by one or more service-disabled veterans.

    (e) Stock options' effect on ownership. In determining unconditional 

ownership, SBA will disregard any unexercised stock options or similar 

agreements held by service-disabled veterans. However, any unexercised 

stock options or similar agreements (including rights to convert non-

voting stock or debentures into voting stock) held by non-service-

disabled veterans sill be treated as exercised, except for any ownership 

interests which are held by investment companies licensed under the 

Small Business Investment Act of 1958.

    (f) Change of ownership. A concern may change its ownership or 

business structure so long as one or more service-disabled veterans own 

and control it after the change.