Minority Shareholder Rights Affiliate

If a minority shareholder irrevocably gives up rights, is it still considered to be an affiliate of the business?

No. If a minority shareholder of a business irrevocably relinquishes or waives existing rights, the minority shareholder would no longer be an affiliate of the business. There is an assumption that no other relationships that trigger the affiliation rules).

Linked here and pasted below is the text from the official question and answer document published by the Department of the Treasury on April 10, 2020, which you should reference:

https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf

Below is the official question from Q6 as of April 10, 2020

6. Question: The affiliation rule based on ownership (13 C.F.R. 121.301(f)(1)) states that SBA will deem a minority shareholder in a business to control the business if the shareholder has the right to prevent a quorum or otherwise block action by the board of directors or shareholders. If a minority shareholder irrevocably gives up those rights, is it still considered to be an affiliate of the business?

Below is the official answer from Q6 as of April 10, 2020

Answer: No. If a minority shareholder in a business irrevocably waives or relinquishes any existing rights specified in 13 C.F.R. 121.301(f)(1), the minority shareholder would no longer be an affiliate of the business (assuming no other relationship that triggers the affiliation rules).

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