---
kind: "section"
citation: "15 U.S.C. § 80a–56"
title: "15"
title_heading: "Commerce and Trade"
number: "80a–56"
heading: "Transactions with certain affiliates"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/80a-56"
units:
  - "Chapter 2D — Investment Companies and Advisers"
  - "Subchapter I — Investment Companies"
---

# §80a–56. Transactions with certain affiliates

- (a) **Transactions involving controlling or closely affiliated persons—** It shall be unlawful for any [person](/usc/15/80a–2.md?p=a-28) who is related to a [business development company](/usc/15/80a–2.md?p=a-48) in a manner described in [subsection (b)](#b) of this section, acting as principal—
  - (1) knowingly to sell any [security](/usc/15/80a–2.md?p=a-36) or other property to such [business development company](/usc/15/80a–2.md?p=a-48) or to any [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48), unless such sale involves solely (A) [securities](/usc/15/80a–2.md?p=a-36) of which the buyer is the [issuer](/usc/15/80a–2.md?p=a-22), or (B) [securities](/usc/15/80a–2.md?p=a-36) of which the seller is the [issuer](/usc/15/80a–2.md?p=a-22) and which are part of a general offering to the holders of a class of its [securities](/usc/15/80a–2.md?p=a-36);
  - (2) knowingly to purchase from such [business development company](/usc/15/80a–2.md?p=a-48) or from any [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48), any [security](/usc/15/80a–2.md?p=a-36) or other property (except [securities](/usc/15/80a–2.md?p=a-36) of which the seller is the [issuer](/usc/15/80a–2.md?p=a-22));
  - (3) knowingly to borrow money or other property from such [business development company](/usc/15/80a–2.md?p=a-48) or from any [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48) (unless the borrower is controlled by the lender), except as permitted in [section 80a–21(b)](/usc/15/80a–21.md?p=b) or [section 80a–61 of this title](/usc/15/80a–61.md); or
  - (4) knowingly to effect any transaction in which such [business development company](/usc/15/80a–2.md?p=a-48) or a [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48) is a joint or a joint and several participant with such [person](/usc/15/80a–2.md?p=a-28) in contravention of such rules and regulations as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe for the purpose of limiting or preventing participation by such [business development company](/usc/15/80a–2.md?p=a-48) or controlled [company](/usc/15/80a–2.md?p=a-8) on a basis less advantageous than that of such [person](/usc/15/80a–2.md?p=a-28), except that nothing contained in this paragraph shall be deemed to preclude any [person](/usc/15/80a–2.md?p=a-28) from acting as manager of any underwriting syndicate or other group in which such [business development company](/usc/15/80a–2.md?p=a-48) or controlled [company](/usc/15/80a–2.md?p=a-8) is a participant and receiving compensation therefor.
- (b) **Controlling or closely affiliated persons—** The provisions of [subsection (a)](#a) of this section shall apply to the following [persons](/usc/15/80a–2.md?p=a-28):
  - (1) Any [director](/usc/15/80a–2.md?p=a-12), officer, employee, or member of an [advisory board](/usc/15/80a–2.md?p=a-1) of a [business development company](/usc/15/80a–2.md?p=a-48) or any [person](/usc/15/80a–2.md?p=a-28) (other than the [business development company](/usc/15/80a–2.md?p=a-48) itself) who is, within the meaning of [section 80a–2(a)(3)(C) of this title](/usc/15/80a–2.md), an affiliated [person](/usc/15/80a–2.md?p=a-28) of any such [person](/usc/15/80a–2.md?p=a-28) specified in this paragraph.
  - (2) Any [investment adviser](/usc/15/80b–2.md?p=a-11) or promoter of, general partner in, principal underwriter for, or [person](/usc/15/80a–2.md?p=a-28) directly or indirectly either controlling, controlled by, or under common [control](/usc/15/80a–2.md?p=a-9) with, a [business development company](/usc/15/80a–2.md?p=a-48) (except the [business development company](/usc/15/80a–2.md?p=a-48) itself and any [person](/usc/15/80a–2.md?p=a-28) who, if it were not directly or indirectly controlled by the [business development company](/usc/15/80a–2.md?p=a-48), would not be directly or indirectly under the [control](/usc/15/80a–2.md?p=a-9) of a [person](/usc/15/80a–2.md?p=a-28) who [controls](/usc/15/80a–2.md?p=a-9) the [business development company](/usc/15/80a–2.md?p=a-48)), or any [person](/usc/15/80a–2.md?p=a-28) who is, within the meaning of [section 80a–2(a)(3)(C)](/usc/15/80a–2.md) or (D) of this title, an affiliated [person](/usc/15/80a–2.md?p=a-28) of any such [person](/usc/15/80a–2.md?p=a-28) specified in this paragraph.
- (c) **Exemption orders—** Notwithstanding paragraphs [(1)](#a-1), [(2)](#a-2), and [(3)](#a-3) of subsection (a), any [person](/usc/15/80a–2.md?p=a-28) may file with the [Commission](/usc/15/80a–2.md?p=a-7) an application for an order exempting a proposed transaction of the [applicant](/usc/15/7a.md?p=3) from one or more provisions of such paragraphs. The [Commission](/usc/15/80a–2.md?p=a-7) shall grant such application and issue such order of exemption if evidence establishes that—
  - (1) the terms of the proposed transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching of the [business development company](/usc/15/80a–2.md?p=a-48) or its shareholders or partners on the part of any [person](/usc/15/80a–2.md?p=a-28) concerned;
  - (2) the proposed transaction is consistent with the policy of the [business development company](/usc/15/80a–2.md?p=a-48) as recited in the filings made by such [company](/usc/15/80a–2.md?p=a-8) with the [Commission](/usc/15/80a–2.md?p=a-7) under the Securities Act of 1933 [[15 U.S.C. 77a](/usc/15/77a.md) et seq.], its registration statement and reports filed under the [Securities](/usc/15/80a–2.md?p=a-36) Exchange Act of 1934 [[15 U.S.C. 78a](/usc/15/78a.md) et seq.], and its reports to shareholders or partners; and
  - (3) the proposed transaction is consistent with the general purposes of this subchapter.
- (d) **Transactions involving noncontrolling shareholders or affiliated persons—** It shall be unlawful for any [person](/usc/15/80a–2.md?p=a-28) who is related to a [business development company](/usc/15/80a–2.md?p=a-48) in the manner described in [subsection (e)](#e) of this section and who is not subject to the prohibitions of [subsection (a)](#a) of this section, acting as principal—
  - (1) knowingly to sell any [security](/usc/15/80a–2.md?p=a-36) or other property to such [business development company](/usc/15/80a–2.md?p=a-48) or to any [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48), unless such sale involves solely (A) [securities](/usc/15/80a–2.md?p=a-36) of which the buyer is the [issuer](/usc/15/80a–2.md?p=a-22), or (B) [securities](/usc/15/80a–2.md?p=a-36) of which the seller is the [issuer](/usc/15/80a–2.md?p=a-22) and which are part of a general offering to the holders of a class of its [securities](/usc/15/80a–2.md?p=a-36);
  - (2) knowingly to purchase from such [business development company](/usc/15/80a–2.md?p=a-48) or from any [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48), any [security](/usc/15/80a–2.md?p=a-36) or other property (except [securities](/usc/15/80a–2.md?p=a-36) of which the seller is the [issuer](/usc/15/80a–2.md?p=a-22));
  - (3) knowingly to borrow money or other property from such [business development company](/usc/15/80a–2.md?p=a-48) or from any [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48) (unless the borrower is controlled by the lender), except as permitted in [section 80a–21(b) of this title](/usc/15/80a–21.md?p=b); or
  - (4) knowingly to effect any transaction in which such [business development company](/usc/15/80a–2.md?p=a-48) or a [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48) is a joint or a joint and several participant with such affiliated [person](/usc/15/80a–2.md?p=a-28) in contravention of such rules and regulations as the [Commission](/usc/15/80a–2.md?p=a-7) may prescribe for the purpose of limiting or preventing participation by such [business development company](/usc/15/80a–2.md?p=a-48) or controlled [company](/usc/15/80a–2.md?p=a-8) on a basis less advantageous than that of such affiliated [person](/usc/15/80a–2.md?p=a-28), except that nothing contained in this paragraph shall be deemed to preclude any [person](/usc/15/80a–2.md?p=a-28) from acting as manager of any underwriting syndicate or other group in which such [business development company](/usc/15/80a–2.md?p=a-48) or controlled [company](/usc/15/80a–2.md?p=a-8) is a participant and receiving compensation therefor.
- (e) **Noncontrolling shareholders or affiliated persons; executive officer—** The provisions of [subsection (d)](#d) of this section shall apply to the following [persons](/usc/15/80a–2.md?p=a-28):
  - (1) Any [person](/usc/15/80a–2.md?p=a-28) (A) who is, within the meaning of [section 80a–2(a)(3)(A) of this title](/usc/15/80a–2.md), an affiliated [person](/usc/15/80a–2.md?p=a-28) of a [business development company](/usc/15/80a–2.md?p=a-48), (B) who is an executive officer or a [director](/usc/15/80a–2.md?p=a-12) of, or general partner in, any such affiliated [person](/usc/15/80a–2.md?p=a-28), or (C) who directly or indirectly either [controls](/usc/15/80a–2.md?p=a-9), is controlled by, or is under common [control](/usc/15/80a–2.md?p=a-9) with, such affiliated [person](/usc/15/80a–2.md?p=a-28).
  - (2) Any [person](/usc/15/80a–2.md?p=a-28) who is an affiliated [person](/usc/15/80a–2.md?p=a-28) of a [director](/usc/15/80a–2.md?p=a-12), officer, employee, [investment adviser](/usc/15/80b–2.md?p=a-11), member of an [advisory board](/usc/15/80a–2.md?p=a-1) or promoter of, principal underwriter for, general partner in, or an affiliated [person](/usc/15/80a–2.md?p=a-28) of any [person](/usc/15/80a–2.md?p=a-28) directly or indirectly either controlling or under common [control](/usc/15/80a–2.md?p=a-9) with a [business development company](/usc/15/80a–2.md?p=a-48) (except the [business development company](/usc/15/80a–2.md?p=a-48) itself and any [person](/usc/15/80a–2.md?p=a-28) who, if it were not directly or indirectly controlled by the [business development company](/usc/15/80a–2.md?p=a-48), would not be directly or indirectly under the [control](/usc/15/80a–2.md?p=a-9) of a [person](/usc/15/80a–2.md?p=a-28) who [controls](/usc/15/80a–2.md?p=a-9) the [business development company](/usc/15/80a–2.md?p=a-48)).

  For purposes of this subsection, the term “executive officer” means the president, secretary, treasurer, any vice president in charge of a principal business function, and any other [person](/usc/15/80a–2.md?p=a-28) who performs similar policymaking functions.

- (f) **Approval of proposed transactions—** Notwithstanding [subsection (d)](#d) of this section, a [person](/usc/15/80a–2.md?p=a-28) described in [subsection (e)](#e) may engage in a proposed transaction described in [subsection (d)](#d) if such proposed transaction is approved by the required majority (as defined in [subsection (o)](#o)) of the [directors](/usc/15/80a–2.md?p=a-12) of or general partners in the [business development company](/usc/15/80a–2.md?p=a-48) on the basis that—
  - (1) the terms thereof, including the consideration to be paid or received, are reasonable and fair to the shareholders or partners of the [business development company](/usc/15/80a–2.md?p=a-48) and do not involve overreaching of such [company](/usc/15/80a–2.md?p=a-8) or its shareholders or partners on the part of any [person](/usc/15/80a–2.md?p=a-28) concerned;
  - (2) the proposed transaction is consistent with the interests of the shareholders or partners of the [business development company](/usc/15/80a–2.md?p=a-48) and is consistent with the policy of such [company](/usc/15/80a–2.md?p=a-8) as recited in filings made by such [company](/usc/15/80a–2.md?p=a-8) with the [Commission](/usc/15/80a–2.md?p=a-7) under the Securities Act of 1933 [[15 U.S.C. 77a](/usc/15/77a.md) et seq.], its registration statement and reports filed under the [Securities](/usc/15/80a–2.md?p=a-36) Exchange Act of 1934 [[15 U.S.C. 78a](/usc/15/78a.md) et seq.], and its reports to shareholders or partners; and
  - (3) the [directors](/usc/15/80a–2.md?p=a-12) or general partners record in their minutes and preserve in their records, for such periods as if such records were required to be maintained pursuant to [section 80a–30(a) of this title](/usc/15/80a–30.md?p=a), a description of such transaction, their findings, the information or materials upon which their findings were based, and the basis therefor.
- (g) **Transactions in the ordinary course of business—** Notwithstanding subsection [(a)](#a) or [(d)](#d), a [person](/usc/15/80a–2.md?p=a-28) may, in the ordinary course of business, sell to or purchase from any [company](/usc/15/80a–2.md?p=a-8) merchandise or may enter into a lessor-lessee relationship with any [person](/usc/15/80a–2.md?p=a-28) and furnish the services incident thereto.
- (h) **Inquiry procedures—** The [directors](/usc/15/80a–2.md?p=a-12) of or general partners in any [business development company](/usc/15/80a–2.md?p=a-48) shall adopt, and periodically review and update as appropriate, procedures reasonably designed to ensure that reasonable inquiry is made, prior to the consummation of any transaction in which such [business development company](/usc/15/80a–2.md?p=a-48) or a [company](/usc/15/80a–2.md?p=a-8) controlled by such [business development company](/usc/15/80a–2.md?p=a-48) proposes to participate, with respect to the possible involvement in the transaction of [persons](/usc/15/80a–2.md?p=a-28) described in subsections [(b)](#b) and [(e)](#e) of this section.
- (i) **Rules and regulations of Commission—** Until the adoption by the [Commission](/usc/15/80a–2.md?p=a-7) of rules or regulations under subsections [(a)](#a) and [(d)](#d) of this section, the rules and regulations of the [Commission](/usc/15/80a–2.md?p=a-7) under subsections (a) and (d) of [section 80a–17 of this title](/usc/15/80a–17.md) applicable to registered closed-end investment [companies](/usc/15/80a–2.md?p=a-8) shall be deemed to apply to transactions subject to subsections [(a)](#a) and [(d)](#d) of this section. Any rules or regulations adopted by the [Commission](/usc/15/80a–2.md?p=a-7) to implement this section shall be no more restrictive than the rules or regulations adopted by the [Commission](/usc/15/80a–2.md?p=a-7) under subsections (a) and (d) of [section 80a–17 of this title](/usc/15/80a–17.md) that are applicable to all registered closed-end investment [companies](/usc/15/80a–2.md?p=a-8).
- (j) **Warrants, options, and rights to purchase voting securities; loans to facilitate executive compensation plans—** Notwithstanding subsections [(a)](#a) and [(d)](#d) of this section, any [director](/usc/15/80a–2.md?p=a-12), officer, or employee of, or general partner in, a [business development company](/usc/15/80a–2.md?p=a-48) may—
  - (1) acquire warrants, options, and rights to purchase [voting securities](/usc/15/80a–2.md?p=a-42) of such [business development company](/usc/15/80a–2.md?p=a-48), and [securities](/usc/15/80a–2.md?p=a-36) issued upon the exercise or conversion thereof, pursuant to an executive compensation plan offered by such [company](/usc/15/80a–2.md?p=a-8) which meets the requirements of [section 80a–60(a)(4)(B) of this title](/usc/15/80a–60.md?p=a-4-B); and
  - (2) borrow money from such [business development company](/usc/15/80a–2.md?p=a-48) for the purpose of purchasing [securities](/usc/15/80a–2.md?p=a-36) issued by such [company](/usc/15/80a–2.md?p=a-8) pursuant to an executive compensation plan, if each such loan—
    - (A) has a term of not more than ten years;
    - (B) becomes due within a reasonable time, not to exceed sixty days, after the termination of such [person](/usc/15/80a–2.md?p=a-28)’s employment or service;
    - (C) bears interest at no less than the prevailing rate applicable to 90-day United States Treasury bills at the time the loan is made;
    - (D) at all times is fully collateralized (such collateral may include any [securities](/usc/15/80a–2.md?p=a-36) issued by such [business development company](/usc/15/80a–2.md?p=a-48)); and
    - (E)
      - (i) in the case of a loan to any officer or employee of such [business development company](/usc/15/80a–2.md?p=a-48) (including any officer or employee who is also a [director](/usc/15/80a–2.md?p=a-12) of such [company](/usc/15/80a–2.md?p=a-8)), is approved by the required majority (as defined in [subsection (o)](#o)) of the [directors](/usc/15/80a–2.md?p=a-12) of or general partners in such [company](/usc/15/80a–2.md?p=a-8) on the basis that the loan is in the best interests of such [company](/usc/15/80a–2.md?p=a-8) and its shareholders or partners; or
      - (ii) in the case of a loan to any [director](/usc/15/80a–2.md?p=a-12) of such [business development company](/usc/15/80a–2.md?p=a-48) who is not also an officer or employee of such [company](/usc/15/80a–2.md?p=a-8), or to any general partner in such [company](/usc/15/80a–2.md?p=a-8), is approved by order of the [Commission](/usc/15/80a–2.md?p=a-7), upon application, on the basis that the terms of the loan are fair and reasonable and do not involve overreaching of such [company](/usc/15/80a–2.md?p=a-8) or its shareholders or partners.
- (k) **Restriction on brokerage commissions—** It shall be unlawful for any [person](/usc/15/80a–2.md?p=a-28) described in [subsection (l)](#l)—
  - (1) acting as agent, to accept from any source any compensation (other than a regular salary or wages from the [business development company](/usc/15/80a–2.md?p=a-48)) for the purchase or sale of any property to or for such [business development company](/usc/15/80a–2.md?p=a-48) or any controlled [company](/usc/15/80a–2.md?p=a-8) thereof, except in the course of such [person](/usc/15/80a–2.md?p=a-28)’s business as an underwriter or [broker](/usc/15/80a–2.md?p=a-6); or
  - (2) acting as [broker](/usc/15/80a–2.md?p=a-6), in connection with the sale of [securities](/usc/15/80a–2.md?p=a-36) to or by the [business development company](/usc/15/80a–2.md?p=a-48) or any controlled [company](/usc/15/80a–2.md?p=a-8) thereof, to receive from any source a [commission](/usc/15/80a–2.md?p=a-7), fee, or other remuneration for effecting such transaction which exceeds—
    - (A) the usual and customary [broker](/usc/15/80a–2.md?p=a-6)’s [commission](/usc/15/80a–2.md?p=a-7) if the sale is effected on a [securities](/usc/15/80a–2.md?p=a-36) [exchange](/usc/15/80a–2.md?p=a-14);
    - (B) 2 per centum of the sales price if the sale is effected in connection with a secondary distribution of such [securities](/usc/15/80a–2.md?p=a-36); or
    - (C) 1 per centum of the purchase or sale price of such [securities](/usc/15/80a–2.md?p=a-36) if the sale is otherwise effected,

  unless the [Commission](/usc/15/80a–2.md?p=a-7), by rules and regulations or order in the public interest and consistent with the protection of investors, permits a larger [commission](/usc/15/80a–2.md?p=a-7).

- (l) **Persons subject to brokerage commission restrictions—** The provisions of [subsection (k)](#k) of this section shall apply to the following [persons](/usc/15/80a–2.md?p=a-28):
  - (1) Any affiliated [person](/usc/15/80a–2.md?p=a-28) of a [business development company](/usc/15/80a–2.md?p=a-48).
  - (2)
    - (A) Any [person](/usc/15/80a–2.md?p=a-28) who is, within the meaning of [section 80a–2(a)(3)(B)](/usc/15/80a–2.md), (C), or (D) of this title, an affiliated [person](/usc/15/80a–2.md?p=a-28) of any [director](/usc/15/80a–2.md?p=a-12), officer, employee, or member of an [advisory board](/usc/15/80a–2.md?p=a-1) of the [business development company](/usc/15/80a–2.md?p=a-48).
    - (B) Any [person](/usc/15/80a–2.md?p=a-28) who is, within the meaning of [section 80a–2(a)(3)(A)](/usc/15/80a–2.md), (B), (C), or (D) of this title, an affiliated [person](/usc/15/80a–2.md?p=a-28) of any [investment adviser](/usc/15/80b–2.md?p=a-11) of, general partner in, or [person](/usc/15/80a–2.md?p=a-28) directly or indirectly either controlling, controlled by, or under common [control](/usc/15/80a–2.md?p=a-9) with, the [business development company](/usc/15/80a–2.md?p=a-48).
    - (C) Any [person](/usc/15/80a–2.md?p=a-28) who is, within the meaning of [section 80a–2(a)(3)(C) of this title](/usc/15/80a–2.md), an affiliated [person](/usc/15/80a–2.md?p=a-28) of any [person](/usc/15/80a–2.md?p=a-28) who is an affiliated [person](/usc/15/80a–2.md?p=a-28) of the [business development company](/usc/15/80a–2.md?p=a-48) within the meaning of [section 80a–2(a)(3)(A) of this title](/usc/15/80a–2.md).
- (m) **Receipt of fee or salary from transaction participant—** For purposes of subsections [(a)](#a) and [(d)](#d), a [person](/usc/15/80a–2.md?p=a-28) who is a [director](/usc/15/80a–2.md?p=a-12), officer, or employee of a party to a transaction and who receives his usual and ordinary fee or salary for usual and customary services as a [director](/usc/15/80a–2.md?p=a-12), officer, or employee from such party shall not be deemed to have a financial interest or to participate in the transaction solely by reason of his receipt of such fee or salary.
- (n) **Profit-sharing plans—**
  - (1) Notwithstanding [subsection (a)(4)](#a-4) of this section, a [business development company](/usc/15/80a–2.md?p=a-48) may establish and maintain a profit-sharing plan for its [directors](/usc/15/80a–2.md?p=a-12), officers, employees, and general partners and such [directors](/usc/15/80a–2.md?p=a-12), officers, employees, and general partners may participate in such profit-sharing plan, if—
    - (A)
      - (i) in the case of a profit-sharing plan for officers and employees of the [business development company](/usc/15/80a–2.md?p=a-48) (including any officer or employee who is also a [director](/usc/15/80a–2.md?p=a-12) of such [company](/usc/15/80a–2.md?p=a-8)), such profit-sharing plan is approved by the required majority (as defined in [subsection (o)](#o)) of the [directors](/usc/15/80a–2.md?p=a-12) of or general partners in such [company](/usc/15/80a–2.md?p=a-8) on the basis that such plan is reasonable and fair to the shareholders or partners of such [company](/usc/15/80a–2.md?p=a-8), does not involve overreaching of such [company](/usc/15/80a–2.md?p=a-8) or its shareholders or partners on the part of any [person](/usc/15/80a–2.md?p=a-28) concerned, and is consistent with the interests of the shareholders or partners of such [company](/usc/15/80a–2.md?p=a-8); or
      - (ii) in the case of a profit-sharing plan which includes one or more [directors](/usc/15/80a–2.md?p=a-12) of the [business development company](/usc/15/80a–2.md?p=a-48) who are not also officers or employees of such [company](/usc/15/80a–2.md?p=a-8), or one or more general partners in such [company](/usc/15/80a–2.md?p=a-8), such profit-sharing plan is approved by order of the [Commission](/usc/15/80a–2.md?p=a-7), upon application, on the basis that such plan is reasonable and fair to the shareholders or partners of such [company](/usc/15/80a–2.md?p=a-8), does not involve overreaching of such [company](/usc/15/80a–2.md?p=a-8) or its shareholders or partners on the part of any [person](/usc/15/80a–2.md?p=a-28) concerned, and is consistent with the interests of the shareholders or partners of such [company](/usc/15/80a–2.md?p=a-8); and
    - (B) the aggregate amount of benefits which would be paid or accrued under such plan shall not exceed 20 per centum of the [business development company](/usc/15/80a–2.md?p=a-48)’s net income after taxes in any fiscal year.
  - (2) This subsection may not be used where the [business development company](/usc/15/80a–2.md?p=a-48) has outstanding any stock option, warrant, or right issued as part of an executive compensation plan, including a plan pursuant to [section 80a–60(a)(4)(B) of this title](/usc/15/80a–60.md?p=a-4-B), or has an [investment adviser](/usc/15/80b–2.md?p=a-11) registered or required to be registered under subchapter II of this chapter.
- (o) **Required majority for approval of proposed transactions—** The term “required majority”, when used with respect to the approval of a proposed transaction, plan, or arrangement, means both a majority of a [business development company](/usc/15/80a–2.md?p=a-48)’s [directors](/usc/15/80a–2.md?p=a-12) or general partners who have no financial interest in such transaction, plan, or arrangement and a majority of such [directors](/usc/15/80a–2.md?p=a-12) or general partners who are not interested [persons](/usc/15/80a–2.md?p=a-28) of such [company](/usc/15/80a–2.md?p=a-8).

## Source credit

(Aug. 22, 1940, ch. 686, title I, § 57, as added Pub. L. 96–477, title I, § 105, Oct. 21, 1980, 94 Stat. 2280; amended Pub. L. 100–181, title VI, § 627, Dec. 4, 1987, 101 Stat. 1263; Pub. L. 115–141, div. S, title VIII, § 802(b)(2)(A), Mar. 23, 2018, 132 Stat. 1140.)

## Notes

### Editorial Notes

### References in Text

The Securities Act of 1933, referred to in subsecs. (c)(2) and (f)(2), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classified generally to subchapter I (§ 77a et seq.) of chapter 2A of this title. For complete classification of this Act to the Code, see section 77a of this title and Tables.

The Securities Exchange Act of 1934, referred to in subsecs. (c)(2) and (f)(2), is act June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of this title. For complete classification of this Act to the Code, see section 78a of this title and Tables.

### Amendments

2018—Subsecs. (j)(1), (n)(2). Pub. L. 115–141 substituted “section 80a–60(a)(4)(B) of this title” for “section 80a–60(a)(3)(B) of this title”.

1987—Subsec. (i). Pub. L. 100–181 substituted “subsections (a) and (d) of section 80a–17 of this title” for “sections 80a–17(a) and (d) of this title” in two places.