Form 526 - Rural Small Business Capital Company Information Report Page 2
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32011 Form 526 - page 2
Instructions and Guidelines for Preparing
Rural Small Business Capital Company Information Report
68 Oklahoma Statutes (OS) Sec. 2357.71-2357.76 and Rule 710:50-15-87
Reporting Requirements
Each Rural Small Business Capital Company shall file Form 526 with the Oklahoma Tax Commission (OTC) by April 30th
following the year in which investments were made. Enclose a copy of the capital company’s annual financial statements,
including documentation to indicate the methods of operation and conduct of the business of the capital company.* This
information will be used by the OTC to determine whether the capital company is complying with the terms of the Rural
Venture Capital Formation Incentive Act and any rules promulgated by the OTC. No credit shall be allowed for an invest-
ment in the capital company unless such information is provided.
This report shall contain a list of all qualified investments made in, or in conjunction with, the Rural Small Business Capital
Company that may qualify for the tax credit allowed by this act. The report shall state the type and amount of the qualified
investment, the date of the investment, the name and identification number of the entity making the investment and the
business in which the investment was made.
This report shall also contain information regarding the qualified investments made by the Rural Small Business Capi-
tal Company in Oklahoma Rural Small Business Ventures. The report shall state the name and identification number of
the business in which the investment was made, the type of the business, the date of the investment, and the type and
amount of the investment.
* Note: Federally regulated investment companies are exempt from this reporting requirement. As a condition of the ex-
emption such companies are required to provide documentation as set out in 68 OS Sec. 2357.65A.
Additional Reporting Requirement
•
Each qualified Rural Small Business Capital Company shall also make Form 526-A available to all investors in
such company by January 31st. This form shall show the name of the qualified Rural Small Business Capital
Company, the name of the investor, the date of the investment, the total amount of qualified investments in, or in
conjunction with, the company made by such investor and the amount of credit currently available. This form shall
be enclosed with the filed Oklahoma income tax return of the taxpayer claiming the credit.
•
Qualified Rural Small Business Capital Companies or any entity making an investment in conjunction with an
investment by a qualified Rural Small Business Capital Company must notify the OTC within 20 business days if:
1. The investment in an Oklahoma Rural Small Business Venture is transferred, withdrawn or otherwise
returned; or
2. An occurrence upon which an investment is contingent has taken place.
Send such notification to the address shown at the end of the instructions.
Definitions
A qualified Rural Small Business Capital Company can be a “C” or subchapter “S” corporation as defined by the Inter-
nal Revenue Code, incorporated pursuant to the laws of Oklahoma; a limited liability company; or a registered business
partnership with a certificate of partnership filed as required by law. The qualified Rural Small Business Capital Company
must be organized to provide the direct investment of equity and near-equity funds to Oklahoma Rural Small Business
Ventures. The principal place of business must be located within Oklahoma. The capitalization of the Rural Small Busi-
ness Capital Company must be at least $500,000 and it cannot invest more than 25% of its funds in any one rural small
business entity at any time during the calendar year.
An Oklahoma Rural Small Business Venture can be any business, incorporated or unincorporated, which has, or will have,
within 180 days after a qualified investment is made by a Rural Small Business Capital Company, 50% of its employees
or assets in Oklahoma. Further, the business must need financial assistance to start or expand such business which
provides, or intends to provide, goods or services. Its principal place of business is within a non-metropolitan area of the
state and conducts the activity resulting in at least 75% of its gross annual revenue from a non-metropolitan area of the
state. The business venture must qualify as a small business as defined by the Federal Small Business Administration.
The Oklahoma Rural Small Business Venture must be engaged in a lawful business activity under any Industry Number
appearing under any Major Group Number of Divisions A, C, D, E, F, or I of the Standard Industrial Classification Manual,
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