Form 527-A Draft - Small Business Capital Company Report For Investors

Form 527-A - Page 2

Instructions and Guidelines for Preparing

Small Business Capital Company Report for Investors

Title 68 O.S. Section 2357.60-2357.65 and Rule 710:50-15-86

Part 1 – Establishing the Credit

Column 1:

List the date(s) the investor invested in, or in conjunction with, the Small Business Capital Company.

Column 2:

List the total amount(s) invested in, or in conjunction with, the Small Business Capital Company. Any funds invested in an

Oklahoma Small Business Venture shall be subject to the following requirements:

1. The Oklahoma Small Business Venture must issue its equity securities or subordinated debt instruments in

exchange for a qualified investment within 30 days of the date as of which the investment occurs;

2. The qualified Small Business Capital Company or any entity making an investment in conjunction with investment

by a qualified Small Business Capital Company must reflect the documented qualified investment in the

Oklahoma Small Business Venture as an asset in its accounting system;

3. The qualified Small Business Capital Company shall not make a qualified investment in an Oklahoma Small

Business Venture in which it has, at any time, more than 50% ownership, whether directly or indirectly, of the

voting interest entitled to elect the governing board of any Oklahoma Small Business Venture in which a qualified

investment is to be made by the qualified Small Business Capital Company; and

4. Neither the qualified Small Business Capital Company nor the Oklahoma Small Business Venture can enter into

Draft

any agreement, whether formal or informal, written or unwritten, the purpose of which is to control, directly or

indirectly, the return of a specific amount of qualified investment by the Oklahoma Small Business Venture to the

qualified Small Business Capital Company or the purpose of which is to cause or require the transfer of such

8/12/09

specific amount of qualified investment to any other entity within five years of the date the qualified investment is

made available to the Oklahoma Small Business Venture.

Column 3:

Compute the total Credit available. Multiply the figure in column 2 by 20%.

Note: If a pass-through entity is entitled to the credit, the pass-through entity shall allocate such credit to one or more

of the shareholders, partners or members of the pass-through entity, provided the total of all credits allocated shall not

exceed the amount of the credit to which the pass-through entity is entitled. The credit may only be claimed for funds

borrowed by the pass-through entity to make a qualified investment if a shareholder, partner or member to whom the

credit is allocated has an unlimited and continuing legal obligation to repay the borrowed funds but the allocation may not

exceed such shareholder’s, partner’s or member’s pro-rata equity share of the pass-through entity even if the taxpayer’s

legal obligation to repay the borrowed funds is in excess of such amount.

Column 4:

List the amount of such credit eligible to be claimed this year. The credit for investments made in a Small Business Capi-

tal Company may only be claimed for a taxable year during which such company invests funds in an Oklahoma Small

Business Venture and the credit shall be allowed only for the amount of the funds invested in such venture. The credit

for investments made in conjunction with the Small Business Capital Company may be claimed in the year in which such

investments were made.

Note: If a pass-through entity is entitled to the credit, the pass-through entity shall provide to each partner, shareholder or

member, documentation showing their share of the “total credit allowable in 2009”. Such documentation must be provided

with the partner’s, shareholder’s or member’s income tax return when their share of the credit is being claimed.

Credits

There shall be allowed a credit equal to 20% of a qualified investment in a qualified Small Business Capital Company

which is subsequently invested in an Oklahoma Small Business Venture. The credit may only be claimed in the tax year

in which the Small Business Capital Company makes the qualified investment in an Oklahoma Small Business Venture if

Form 527-A Draft - Small Business Capital Company Report For Investors - 2009 Page 2

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