investment company

investment company
investment company see company

Merriam-Webster’s Dictionary of Law. . 1996.

investment company
n.
A company primarily in the business of trading securities, using its capital to invest in other companies.

The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. . 2008.


investment company
USA
A company that issues securities to investors and also does any of the following:
• Holds itself out as engaging primarily in primarily the business of investing, reinvesting or trading in securities.
• Engages in the business of issuing face amount certificates of the installment type.
• Engages in the business of investing, reinvesting, owning, holding or trading in securities, and owns investment securities having a value exceeding 40% of the value of the issuer's total assets (exclusive of US government securities and cash items) on an unconsolidated basis.
(Section 3(a)(1), Investment Company Act of 1940, as amended (ICA)).
Investment companies are most often set up as either closed or open-ended funds that are also known as mutual funds. Most investment companies are registered with the SEC under the ICA.
Some companies that do not hold themselves out to be investment companies are deemed to be investment companies because more than 40% of their assets consists of investment securities. These companies usually do not register with the SEC because they organize themselves to fall within exemptions from the definition of investment company.
Related terms

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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