PURPOSE: This rule describes the procedure by which an entity makes application to the Department of Economic Development to be certified as a certified capital company.

1. (1) Applications may be submitted by hand delivery or mail to the Missouri Department of Economic Development, Room 720, P.O. Box 118, Truman Office Building, 301 W. High Street, Jefferson City, MO 65102, no earlier than 9:00 a.m., February 10, 1997. Three (3) copies of such application, all with original signatures, must be submitted. Any proposed application submitted prior to that time (whether by hand delivery, mail, or otherwise) shall be considered as not received by the department and shall be returned to the applicant in the same manner in which it was delivered to the department. The department shall review and approve or reject applications in the order submitted, except in the case of incomplete applications or applications for which additional information is requested by the department and is not supplied by the certified capital company (CAP- CO) within the allowable time limits established in section (4) of this rule.
2. (2) In the event more than one (1) application is received by the department on any date, all such applications will be reviewed and approved simultaneously except in the case of incomplete applications or applications for which additional information is requested by the department and is not supplied by the CAPCO within the allowable time limits established in section (4) of this rule.

3. (3) A completed application shall include the following:

   1. (A) Legal name, address (of headquarters and all other operations), telephone number, contact person for the CAPCO, and a sworn statement signed by the chief officer of the CAPCO that the headquarters and primary operation of the CAPCO will remain in Missouri for the lifetime of the CAPCO;
   2. (B) A listing of the liquid assets of the CAPCO (which must be at least five hundred thousand ($500,000)), with supportive documentation;
   3. (C) Current certificate of good standing from the Missouri secretary of state (if the CAPCO is a corporation);
   4. (D) A listing of all members (with home addresses, Social Security numbers, and dates of birth) of the board of directors, partners, trustees, and managers (principals) of the CAPCO or CAPCO affiliates;

   5. (E) A notarized sworn affidavit from all principals of the CAPCO or CAPCO affiliates involved in the management of the CAP- CO stating that they—

      1. 1. Have read sections 135.500 to

135.529, RSMo;

1. 2. Fully understand the requirements of

the CAPCO statute; 4 CSR 80-7

1. 3. Are not affiliated (employee, board

member, or agent) with a principal of the Missouri Department of Economic Development or the Missouri Development Finance Board, and will not be affiliated with such persons during their affiliation with the CAP- CO;

1. 4. Will not be affiliated (employee,

board member, owner, or agent) with an investor of the CAPCO (or if so, has disclosed such affiliation);

1. 5. Have never been convicted of or are

not currently under indictment or prosecution for securities fraud or other criminal acts (other than minor vehicle violations);

1. 6. Have no overdue federal, state (any

state in the United States), or local (any local government in the United States) tax payments or liens, or outstanding child support payments (from Missouri or any other state);

1. 7. Have not filed for personal bankrupt-

cy within the past ten years; and

1. 8. Have not been ordered to pay, or are

not currently involved in legal action with the state of Missouri or any agency thereof for the payment of funds owed to the state, any agency of the state of Missouri, or other parties that the state of Missouri represents;

1. (F) A certification from the chief officer of the CAPCO that the principals named in the application are a complete and accurate listing of all principals of the CAPCO and any CAPCO affiliates involved in the CAPCO’s management, and that persons affiliated with an investor of the CAPCO are not and will not control the direction of investments of the CAPCO;
2. (G) Organizational documents of the CAP- CO (certified copy of articles of incorporation or organization, partnership agreements, or other similar documents) or, if the CAP- CO is to be managed by a management company or CAPCO affiliate, similar organizational documents as previously specified;
3. (H) The names and addresses of at least two (2) key employees of the CAPCO, or an affiliate of the CAPCO who are involved in the CAPCO’s management decisions, and who will work and reside within the state of Missouri;
4. (I) Business history of the CAPCO (a listing of all business activities within the past three (3) years, including a listing of all venture/seed capital investments in such period). (If the CAPCO has just been formed, the business history is not required);
5. (J) A certification by the chief officer of the CAPCO that any offering material involving the sale of the CAPCO’s securities to an investor shall include the following statement: “By authorizing the formation of a certified capital company, the state of Missouri does not necessarily endorse the quality of management or the potential for earnings of such company, and is not liable for damages or losses by an investor. There are certain statutory limits on the amount of tax credits that may be granted under the provisions of subsection 3 of section 135.503, RSMo. These statutory limits may limit the amount of tax credits that may be earned by any investor as a result of an investment in a Missouri certified capital company. In the event certain statutory provisions (as specified in sections 135.500 to 135.529, RSMo) are violated, the state of Missouri may revoke unused tax credits and require repayment of used tax credits”;
6. (K) Copies or drafts of all offering materials used or to be used in investor solicitations;

7. (L) A certification signed by every principal of the CAPCO that acknowledges and approves the following conditions for certification as a CAPCO:

   1. 1. The CAPCO shall immediately noti-

fy the department when the CAPCO is unable to continue as a viable going concern; when it is subject to litigation which may affect its viability, or if the key management that previously directed or maintained the investments are no longer affiliated with the CAP- CO;

1. 2. The CAPCO shall maintain as its pri-

mary business activity the investment of seed/venture capital in qualified Missouri businesses;

1. 3. The CAPCO shall be headquartered

and have its primary business location within the state of Missouri and at least two key employees of the CAPCO or an affiliate (who are involved in the CAPCO’s investments) shall work and reside within the state of Missouri; and

1. 4. Any false, inaccurate, or misleading

information provided in the application may be grounds for rejection of the application and denial of further consideration, as well as decertification, if such information discovered at a subsequent date would have resulted in the denial of such certification.

1. (4) In the event that an incomplete application is submitted or additional information is requested by the Department of Economic Development, the department shall notify the applicant within fifteen (15) working days of receipt of the application. If an incomplete application is completed or incomplete information is supplied within five (5) working days of the applicant’s receipt of such notice, then the completion of the application or submission of additional information shall have no effect on the date by which the certification applied for must be issued or refused under section 135.508, RSMo, or its place in line for review and approval for certification. If an incomplete application is not completed or the additional information is not supplied within five (5) working days of the applicant’s receipt of the notice thereof, then the number of days in excess of the fifteen (15)-day period shall be added to the seventy-five (75)-day period provided for in section 135.508, RSMo. If such information is not supplied within one hundred and fifty (150) days of the date that the applicant received the notice of an incomplete application or request for additional information, the application shall deemed to be withdrawn, and the department has no obligation to provide additional notices to the applicant.
2. (5) Notwithstanding the provisions of section
3. (4) above, evidence that the five hundred thousand dollar ($500,000)-liquid asset base is available must be submitted at the time of application, or the application shall be deemed not to have been filed. Any application that is deemed not filed by operation of this paragraph must be resubmitted in its entirety, and its place in line for review and approval for certification shall not begin until such resubmission with appropriate evidence that the five hundred thousand dollar ($500,000)-liquid asset base is available.
4. (6) The department shall not recognize applications or will not certify a CAPCO if there has been an exchange of money or other consideration for purposes of gaining an increase in a CAPCO’s place in line for review and approval of an application for certification. If a CAPCO or CAPCO affiliate has purchased the assets or otherwise taken control of another CAPCO for the purpose of gaining certification, such CAPCO shall immediately be decertified.
5. (7) The department shall recognize an application for recertification from CAPCO’s certified or recertified in an immediately preceding year. This application should be presented in the form of a letter listing any changes over the previously filed full application. The CAPCO must provide evidence that the original five hundred thousand dollar ($500,000)-liquid asset base is still available. Capital raised through different allocations must be administered through separate funds for the purpose of measuring investment benchmarks.

AUTHORITY: section 135.529, RSMo Supp. 1997.* Emergency rule filed Jan. 2, 1997, effective Feb. 3, 1997, expired July 1, 1997. Original rule filed Dec. 15, 1997, effective June 30, 1998.

*Original authority 1996.