[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR125.9]

[Page 441]
 
                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.