What a weird bill, it only affects a 4 month period, what is so special about Sept 27, 2010 to Jan 1, 2011?
President Obama Signs a Temporary Bill to Encourage More Angel Investing
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Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#12note that this does not apply to any of the following types of businesses: • Businesses that performed services in health, law, engineering, architecture, accounting, performing arts, consulting, athletics, financial services or brokerage. • Businesses that have as their principal asset the reputation or skill of one or more employees. • Any banking, insurance, financing, leasing, investing or similar business. • Far…
In other words, no consultancies or LLPs. Which makes sense, because otherwise existing firms might take advantage of this policy as a loophole escaping taxes.
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#13So why does this only run for a few months - until the end of the year? If you want to encourage investment in startups doesn't this have to be permanent - not just a hand out for deals that are already in progress. (assuming it's not just a technical point that it needs a special bill for the current year and then becomes permanent as part of some other legislation)
You timebox something to encourage immediate action. Making it permanent or even long term may encourage investors to wait for the market to improve before acting, which isn't ideal for a bill aimed at improving the market.
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#14What a weird bill, it only affects a 4 month period, what is so special about Sept 27, 2010 to Jan 1, 2011?
One hypothesis might be that a more long-lasting bill is being drafted, and this an interim solution.
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#15"The investor must not be a corporation" seems key. Do angel investors really invest out of their own bank accounts or do they form LLCs for this?
Pass-through entity investors such as S Corporations, partnerships, and LLCs have special provisions to share the advantages with their owners. Read the law for details; the accounting could get complicated.
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#16I have money in my own personal savings. I also am on the verge of incorporating.
Can I invest some of my own money to save some money in taxes down the line if I pay dividends to investors?
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#17Does this have to be an ordinary corporation, or does an LLC taxed as a C corporation count as a corporation here? It's a lot less hassle and paperwork to have an LLC.
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#18note that this does not apply to any of the following types of businesses: • Businesses that performed services in health, law, engineering, architecture, accounting, performing arts, consulting, athletics, financial services or brokerage. • Businesses that have as their principal asset the reputation or skill of one or more employees. • Any banking, insurance, financing, leasing, investing or similar business. • Far…
Just wait till it makes it to Fox News tonight, it'll be explicitly for socialist private businesses. EDIT: Come on guys, that's really not funny at all? Socialist private businesses? Throw me a frickin' bone here.
I think it is funny.
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#19I heard about this a while back. One thing that I haven't heard any talk about is how this affects early employees who may have had options in their company.
It sounds like this could benefit people exercising options. At least, I don't recall reading anything that would preclude these benefits from being applied to option purchases.
Does anyone have any insight into this?
Re: President Obama Signs a Temporary Bill to Encourage More Angel Investing
#20"The investor must not be a corporation" seems key. Do angel investors really invest out of their own bank accounts or do they form LLCs for this?
angels usually invest as individuals or via LLCs and super-angels and VCs are usually structured as partnerships so the exclusion won't apply to most active early stage investors.
> angels usually invest as individuals or via LLCs
LLCs are corporations.
I wonder what the bill actually says.