Powell's Small Business Crowdfunding Act Passes Senate

COLUMBUS – State Rep. Jena Powell (R-Arcanum) today announced the Senate approved House Bill 312, her legislation allowing Ohioans to raise up to $5 million through intrastate equity crowdfunding to start, grow, or expand their business.

“I’m on a mission to make Ohio the most business-friendly state in the nation,” said Powell. “The Small Business Crowdfunding Act encourages investment in Ohio businesses and serves as another tool for entrepreneurs to raise capital.”

Crowdfunding is a relatively new and evolving method of raising capital online for startups and small businesses. An individual or entity typically seeks small individual contributions for a large number of people in order to raise funds.

In order to qualify, a business must have 80% of its assets in Ohio, and 80% of the money must be spent in Ohio. Only Ohio residents can purchase securities, and an investor is typically limited to a $10,000 contribution per year.

The crowdfunding must be collected through a website operated by a portal operator who is required to provide disclosures to investors and records to the Division of Securities.

The bill also contains safeguards to protect Ohio consumers and penalties for those who conduct deceptive acts.

The Senate added an amendment that increases the appropriation to the Facilities Establishment Fund to provide funding to state capital projects.

H.B. 312 now heads back to the House for a concurrence vote.