---
kind: "section"
citation: "17 C.F.R. § 275.0-7"
title: "17"
number: "275.0-7"
heading: "Small entities under the Investment Advisers Act for purposes of the Regulatory Flexibility Act."
url: "https://uscodex.org/cfr/17/275.0-7"
---

# §275.0-7. Small entities under the Investment Advisers Act for purposes of the Regulatory Flexibility Act.

- (a) For purposes of Commission rulemaking in accordance with the provisions of Chapter Six of the Administrative Procedure Act ([5 U.S.C. 601](/usc/5/601.md) et seq.) and unless otherwise defined for purposes of a particular rulemaking proceeding, the term small business or small organization for purposes of the Investment Advisers Act of 1940 shall mean an investment adviser that:
  - (1) Has assets under management, as defined under Section 203A(a)(3) of the Act ([15 U.S.C. 80b-3a(a)(2)](/usc/15/80b-3a.md?p=a-2)) and reported on its annual updating amendment to Form ADV ([17 CFR 279.1](/cfr/17/279.1.md)), of less than $25 million, or such higher amount as the Commission may by rule deem appropriate under Section 203A(a)(1)(A) of the Act ([15 U.S.C. 80b-3a(a)(1)(A)](/usc/15/80b-3a.md?p=a-1-A));
  - (2) Did not have total assets of $5 million or more on the last day of the most recent fiscal year; and
  - (3) Does not control, is not controlled by, and is not under common control with another investment adviser that has assets under management of $25 million or more (or such higher amount as the Commission may deem appropriate), or any person (other than a natural person) that had total assets of $5 million or more on the last day of the most recent fiscal year.
- (b) **For purposes of this section—**
  - (1) Control means the power, directly or indirectly, to direct the management or policies of a person, whether through ownership of securities, by contract, or otherwise.
    - (i) **A person is presumed to control a corporation if the person—**
      - (A) Directly or indirectly has the right to vote 25 percent or more of a class of the corporation's voting securities; or
      - (B) Has the power to sell or direct the sale of 25 percent or more of a class of the corporation's voting securities.
    - (ii) A person is presumed to control a partnership if the person has the right to receive upon dissolution, or has contributed, 25 percent or more of the capital of the partnership.
    - (iii) **A person is presumed to control a limited liability company (LLC) if the person—**
      - (A) Directly or indirectly has the right to vote 25 percent or more of a class of the interests of the LLC;
      - (B) Has the right to receive upon dissolution, or has contributed, 25 percent or more of the capital of the LLC; or
      - (C) **Is an elected manager of the LLC.**
    - (iv) **A person is presumed to control a trust if the person is a trustee or managing agent of the trust.**
  - (2) Total assets means the total assets as shown on the balance sheet of the investment adviser or other person described above under [paragraph (a)(3)](#a-3) of this section, or the balance sheet of the investment adviser or such other person with its subsidiaries consolidated, whichever is larger.

## Notes

### Amendments

[63 FR 35515, June 30, 1998, as amended at 65 FR 57448, Sept. 22, 2000; 76 FR 43011, July 19, 2011]

### Authority

Authority: 15 U.S.C. 80b-2(a)(11)(G), 80b-2(a)(11)(H), 80b-2(a)(17), 80b-3, 80b-4, 80b-4a, 80b-6(4), 80b-6a, 80b-11, 1681w(a)(1), 6801-6809, and 6825, unless otherwise noted. Section 275.203A-1 is also issued under 15 U.S.C. 80b-3a. Section 275.203A-2 is also issued under 15 U.S.C. 80b-3a. Section 275.203A-3 is also issued under 15 U.S.C. 80b-3a. Section 275.204-1 is also issued under sec. 407 and 408, Pub. L. 111-203, 124 Stat. 1376. Section 275.204-2 is also issued under 15 U.S.C. 80b-6. Section 275.205-3 is also issued under 15 U.S.C. 80b-5(e). Section 275.204-4 is also issued under sec. 407 and 408, Pub. L. 111-203, 124 Stat. 1376. Section 275.204-5 is also issued under sec. 913, Public Law 111-203, sec. 124 Stat. 1827-28 (2010).

### Amendments

[63 FR 35515, June 30, 1998, as amended at 65 FR 57448, Sept. 22, 2000; 76 FR 43011, July 19, 2011]