The Small Business Administration June 4 proposed to revise its regulations to allow a small business owned and controlled by another to be eligible for funding under the SBA’s Small Business Innovation Research program. The proposed rule is not intended to change the size standard for eligibility (currently less than 500 employees) but to increase the number of eligible firms. Under the proposed rule an SBIR awardee may be either (1) a for-profit business that is at least 51 percent owned and controlled by one or more individuals who are citizens or permanent residents of the US or (2) a for profit firm that is 100 percent owned and controlled by another for-profit business that itself is at least 51 percent owned by the same categories of individuals. Under the proposed rule an applicant for an SBIR award would not need to meet the eligibility requirement when it submits its proposal but rather only at time of award. The proposed rule is intended to change the current situation where a business may not receive an SBIR if it is more than 50% owned and controller by another business – even if together with its parent company, it is below the 500 employee small business standard (Fed. Reg. 33,412, June 4, 2003).
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