DEFINITION of 'Jumpstart Our Business Startups Act - JOBS'

An act signed into law on April 5, 2012 that allays the regulations instituted by the Securities And Exchange Commission on small businesses. The Jumpstart Our Business Startups Act, or JOBS Act, loosens restrictions on capital raising for small businesses, such as allowing them to go public with less than $1 billion in annual gross revenue and giving more legitimacy to the practice of crowd-funding (where firms can solicit publicly for investments.)

BREAKING DOWN 'Jumpstart Our Business Startups Act - JOBS'

The JOBS Act is geared towards allowing firms with potentially innovative ideas to hit the ground running without the obstacle of strict regulatory requirements. However, given the loosening of restrictions, along with allowing for new sources of capital raising, it comes with new provisions protecting potential investors, such as requiring startups utilizing crowd-funding to register with the SEC and provide information on their financial health and risks.

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