Glossary · People and paperwork
Board Seat
In short
A position on a company's board of directors, which grants influence or control over strategic decisions and oversight. This can impact SBA affiliation rules.
What it means in a deal
While less common for small business acquisitions, if a seller note, investor, or other entity provides "negative control" through a board seat, it could trigger SBA affiliation rules. The SBA wants to ensure the borrower, not a third party, has ultimate control over the business's operations and management. Be mindful of any provisions in your operating agreement that grant such control.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Board Seat
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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