§ 1856 Corporate Investment Equity Limits

• •A company can't put more than 10% of its own money into another company without asking for permission first.
• •If the other company is a bank, they can put up to 15% of their money into it without asking.
• •This rule is to make sure companies don't risk too much money in one place.

A big toy company wants to buy a lot of stock in a video game company.

The toy company can only spend up to 10% of its own money on the video game company unless it asks for permission first. If the video game company was a bank, the toy company could spend up to 15% of its money without asking.