Minority Investment Tips To Preserve Small-Business Status

Law360 (March 26, 2020, 5:57 PM EDT) -- Small business set-aside contracts awarded under the Small Business Act remain a huge part of federal procurement spending —the U.S. government awarded $120.8 billion[1] in federal contract dollars to small businesses in 2018 alone — up 33% from 2015.

Yet the U.S. Small Business Administration's regulations limit the ability for small businesses to remain eligible for new set-aside contracts following significant outside investments. The biggest limitation on outside investment is the rule that ownership or control of 50% or more of the voting stock of a small business concern creates a per se, unrebuttable presumption of affiliation between the concern and...

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