Understanding Securities Law
The business professional's guide to securities laws
 

Companies that must file reports with the SEC are governed by the Securities Exchange Act of 1934, which I call the “Filing Reports” Act.  The basic reports are:

• Quarterly Reports on Form 10-Q
• Annual Reports on Form 10-K
• Notice of Certain Events Reports on Form 8-K
• Proxy Statements when you want to solicit shareholder votes
• Ownership Reports you and other officers, directors and large shareholders must file

How do you become an SEC Reporting Company?

Filing a registration statement under the 1933 “Selling Stock” Act

If you file a registration statement under the 1933 “Selling Stock” Act, you become an SEC reporting company by virtue of Section 15(d), which only requires you to file 1934 Act reports on Forms 10-K, 10-Q and 8-K until the end of the fiscal year in which your 1933 Act registration statement was cleared by the SEC. At the end of that year, or any time thereafter, provided you have less than 300 shareholders, you can terminate your status as an SEC Reporting Company by filing Form 15 with the SEC. 

However, if you want to continue to have your stock quoted on the OTCBB, you do not want to terminate your status as an SEC Reporting Company as to do so will disqualify your stock from being able to be quoted on the OTCBB and you will drop to the Pink Sheets. Indeed, you want to assure your continued status as an SEC Reporting Company. To do this, you need to file a Form 8-A. When you file the Form 8-A, you will be subject to filing all other required reports under the 1934 “Filing Reports” Act. 

Filing a registration statement under the 1934 “Filing Reports” Act

You can become an SEC reporting company even if you never file a registration statement under the 1933 “Selling Stock” Act. To do this, you file a Form 10. In fact, Non-Reporting Companies that trade on the Pink Sheets can move up to the OTCBB by filing a Form 10. 

The Form 10 has virtually identical disclosure requirements as the Form S-1. 

In certain circumstances, you may be required to become an SEC Reporting Company and file a Form 10 even if you do not want to do so. Under Section 12(g) of the 1934 Act, you are required to become an SEC Reporting Company if you have more than 500 shareholders and total assets of more than $10 million.