The financial and regulatory market has strained many banks’ resources, requiring many institutions to seek additional capital. For S corporation banks facing these issues, access to capital can be very limited. This has left some S corporation banks considering converting back to C corporation status. To combat this issue, proposed legislation known as the Small Business Capital Improvement Act would provide current S corporation banks additional capital alternatives.
This legislation would provide Subchapter S banks with new sources of capital presently available to C corporations, including:
- Issuing preferred stock
- Increasing the number of shareholders from 100 to 150
- Expanding the types of permissible beneficiaries of an electing small business trust to include nonresident aliens
We will keep you informed of any progress or changes related to the proposed legislation. Please contact your BKD advisor with any questions.
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Informative information-thank you