Louisiana Administrative Code › Title 19 - CORPORATION AND BUSINESS › Part II - Small and Emerging Business Development Program › Chapter 1 - General Provisions › Section II-109 - Control and Management

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				Description. An applicant firm's management and daily business operations must
				be controlled by an owner(s) of the applicant firm who has/have been determined
				to be a small and emerging business person. In order for a small and emerging
				business person to be found to control the firm, that individual must have
				managerial or technical experience and competency directly related to the
				primary industry in which the applicant firm is seeking program certification.
1. The small and emerging business person(s)
				upon whom eligibility is based shall control the board of directors of the
				firm, either in actual numbers of voting directors or through weighted voting.
				In the case of a two-person board of directors where one individual on the
				board is a small and emerging business person and one is not, the formers vote
				must be weighted by share ownership, worth more than one vote to achieve a
				minimum of 51 percent control, in order for the firm to be eligible for the
				program. This does not preclude the appointment of nonvoting or honorary
				directors. All arrangements regarding the structure and voting rights of the
				board must comply with state law and with the firm's articles of incorporation
				and/or bylaws.
2. Individuals who
				are not a small and emerging business person may be involved in the management
				of an applicant's firm and may be stockholders, partners, officers, and/or
				directors of such firm. Such individual(s), their spouse(s) or immediate family
				members who reside in the individual's household may not, however:
a. exercise actual control or have the power
				to control the applicant or certified firm;
b. be an officer or director, stockholder, or
				partner of another firm in the same or similar line of business as the
				applicant or certified firm;
c.
				receive excessive compensation as directors, officers, or employees from either
				the applicant or certified firm. Individual compensation from the firm in any
				form, including dividends, consulting fees, or bonuses, which is paid to a
				non-disadvantaged owner, his/her spouse or immediate family member residing in
				the same household will be deemed excessive if it exceeds the compensation
				received by the small and emerging business person chief executive officer,
				president, partner, or owner, unless the compensation is for a clearly
				identifiable skill for which market rates must be paid for the firm to utilize
				the person's expertise;
d. be
				former employers of the small and emerging business owner(s) of the applicant
				or certified firm, unless the program determines that the contemplated
				relationship between the former employer and the small and emerging business
				person or applicant firm does not give the former actual control or the
				potential to control the applicant or certified firm and if such relationship
				is in the best interest of the certified firm.