What Is SEC Form N-54C?

SEC Form N-54C is a form completed by an investment company and filed with the Securities and Exchange Commission (SEC) for the purpose of withdrawing voluntary election to be regulated as a business development company (BDC).

The full title of the form is noted as Form N-54C Notification of Withdrawal of Election to be Subject to Sections 55 through 65 of the Investment Company Act of 1940 Filed Pursuant to Section 54(C) of the Investment Company Act of 1940.

Understanding SEC Form N-54C

The Investment Company Act of 1940 provides several regulatory options for investment companies. Section 54 of the Act of 1940 allows companies to register as a business development company if they meet the specified provisions outlined in Sections 55 through 65.

Business development companies were created in 1980 to help support the funding of small- and medium-sized businesses in the U.S. BDCs are built to provide funding for the small- and medium-business market through various types of funding including equity, debt, and alternative financial instruments. To obtain BDC status, 70% of a company’s assets must be invested in U.S. firms with market values of US$250 million or less. Companies choosing to register as a BDC must complete Form N-54A Notification of Election to be Subject to Sections 55 through 65 of the Investment Company Act of 1940 Filed Pursuant to Section 54(A) of the Act and potentially Form N-6F Notice of Intent to Elect to be Subject to Sections 55 through 65 of the Investment Company Act of 1940.

If a company has elected to be regulated as a BDC and chooses to withdraw this election then they must file SEC Form N-54C. Section 54(c) of the Act of 1940 discusses how a company may withdraw its election to be regulated as a business development company. Companies can also have their BDC status revoked.

Guidelines for Filing SEC Form N-54C

To withdraw BDC status a company must submit the original N-54C Form and three copies. There is no fee for submitting Form N-54C. Depending on the company's type of withdrawal, it may need to include signatures from the director, board officer, board trustee, and/or a general partner of the firm.

Templates for Form N-54A, Form N-6F, and Form N-54C can be found on the SEC’s “Forms List” webpage. The template for Form N-54C primarily serves as a cover page, providing an outline for basic information and signatures. In addition to the cover page template, companies must also provide a basis for withdrawal. Form N-54C details six withdrawal basis options which are briefly summarized below:

  1. No public offering of securities ever made. Not more than 100 specified security holders. No proposed public offering.
  2. Assets have been significantly distributed. In the process of dissolving the business. Not involved in a merger.
  3. Sold assets or merged. Must disclose details of acquiring/merging company.
  4. Business change with a vote. Must provide voting and reorganization details.
  5. Company has filed Form N-8A. 
  6. Other. Must provide an explanation.

Post-Withdrawal of Election as BDC

Companies can choose to withdraw their election as a BDC for several reasons. The withdrawal of the election is effective as soon as it is received by the SEC. Companies usually have a specific action plan in place for post-withdrawal. Once a company’s withdrawal is effected it may be subject to Sections One through 53 of the Act of 1940 if it has not taken organizational steps otherwise.