Understanding Control Person: Key Legal Insights and Definitions

Definition & meaning

A control person is an individual or entity that has the authority to direct or influence the management and policies of a New Markets Venture Capital (NMVC) Company. This can occur directly or through another entity. Control persons may include:

A general partner of a partnership NMVC Company.
Any individual serving as a general partner, officer, director, or manager of an entity that controls an NMVC Company.
Individuals who own or control at least 10 percent of a partnership NMVC Company and participate in investment decisions.
Individuals who own or control at least 50 percent of a partnership NMVC Company or any related entity.

Table of content

Legal use & context

The term "control person" is primarily used in the context of business and investment law, particularly concerning NMVC Companies. It is relevant in areas such as corporate governance, securities regulation, and investment management. Understanding who qualifies as a control person is crucial for compliance with regulations governing NMVC Companies and can impact investment decisions and reporting requirements. Users can manage related forms and procedures using resources like US Legal Forms, which provide templates drafted by attorneys.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A person who is a general partner in a partnership NMVC Company is considered a control person because they have direct control over the company's operations.

Example 2: An individual who owns 15 percent of an NMVC Company and is involved in making investment decisions qualifies as a control person (hypothetical example).

Relevant laws & statutes

The definition of control person is outlined in 13 CFR 108.50, which is part of the regulations governing the NMVC Program under the Small Business Administration. This regulation provides the framework for understanding control in the context of venture capital investments.

Comparison with related terms

Term	Definition	Difference
Control Person	An individual or entity that has the authority to influence an NMVC Company.	Specifically relates to NMVC Companies and their governance.
General Partner	A partner in a partnership who has unlimited liability and is involved in managing the business.	A general partner is a type of control person but has specific legal responsibilities.
Beneficial Owner	An individual who enjoys the benefits of ownership even if the title is in another name.	Beneficial ownership can exist without control, while a control person must have decision-making authority.

Common misunderstandings

What to do if this term applies to you

If you believe you qualify as a control person, it is essential to understand your responsibilities and the implications for your NMVC Company. Consider consulting with a legal professional to ensure compliance with relevant regulations. Additionally, you can explore US Legal Forms for templates that may assist you in managing your legal obligations effectively.

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Quick facts

Ownership Threshold: 10 percent for participation in decisions; 50 percent for direct control.
Legal Context: NMVC Companies under the Small Business Administration.
Potential Consequences: Regulatory scrutiny and compliance obligations.