Form 10 Registration, Form 10 Effective Date – Securities Lawyer 101
Form 10 registration covers a class of securities under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”). Unlike securities registered under the Securities Act of 1933 (the “Securities Act”), on Form S-1, a registration statement on Form 10 will not cause the company’s securities to become unrestricted. Registration Statements on Form 10 (“Form 10“) become effective automatically after 60 days. Registration statements under the Securities Act only become effective after the issuer has responded to all outstanding SEC comments to the satisfaction of the SEC. Form 10 effective dates may require that the issuer will continue to respond to SEC comments even after effectiveness. Once a Form 10 is declared effective by the SEC, the company becomes subject to SEC reporting requirements.
In going public transactions, a Form 10 can only be used in connection with a trading symbol in limited contexts. Unlike Form S-1, a Form 10 registration statement does not create unrestricted shares and a Form 10 cannot be filed confidentially. When a confidential registration statement is used, the identity of selling shareholders are not readily available to the public on the SEC’s Edgar system. Registering securities on Form 10 will cause the company to be subject to the periodic reporting requirements of the Exchange Act even if the company is not eligible for a stock trading symbol because it does not meet FINRA‘s requirements. This blog post addresses the most common questions we receive about Form 10.
Q. Which issuers can register securities on Form 10?
A. All issuers can register securities on Form 10.
Q. When are issuers required to file a registration statement on Form 10?
A. Issuers with over $10,000,000 in total assets and 750 or more record holders must file a registration statement on Form 10.
Q. Can an issuer voluntarily file a registration statement on Form 10?
A. Yes, an issuer can voluntarily file a Form 10.
Q. When will a Form 10 registration statement become effective?
A. Form 10 registration statements become effective automatically sixty days after the initial Form 10 filing date.
Q. What are the consequences if a Form 10 registration statement becomes effective?
A. The company becomes subject to the reporting requirements of the Exchange Act when the Form 10 becomes effective. This obligates the company to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additionally, the company becomes subject to the SEC’s proxy rules and the company’s management and shareholders become subject to the beneficial reporting requirements of Sections 13 and 16 of the Exchange Act.
Q. If a Form 10 registration statement becomes effective will it result in the assignment of a ticker symbol?
A. If a Form 10 is effective, it will not cause a company’s stock to be traded on an exchange or any quotation service such as the OTC Markets. Additionally, a Form 10 will not result in the assignment of a ticker symbol.
Q. How does a company obtain a ticker symbol after a Form 10 is effective?
A. After a Form 10 is effective, it must seek a ticker symbol through a market maker who submits an application to FINRA. Finra (not the SEC) has its own requirements for tickers symbol assignment.
Q. After a Form 10 is effective, will it satisfy the informational requirements of SEC Rule 15c-211?
A. If the Form 10 is effective and the information contained in the Form 10 is complete and current then the issuer has satisfied SEC Rule 15c-211.
Q. What is a shell company?
A. A shell company is an issuer with no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents or assets consisting of any amount of cash and cash equivalents and nominal other assets.
Q. If a non-reporting company was a shell company ten years ago, is it required to register a class of securities on Form 10 to cure its shell status before its shareholders can rely on Rule 144’s safe harbor?
A. Yes, if a non-reporting entity was a shell company at any time during any time its history, the company must register a class of securities on Form 10 pursuant to the Exchange Act or its stockholders cannot rely upon rule 144’s safe harbor.
Q. How does an issuer cure shell company status for purposes of Rule 144?
A. An issuer can cure shell company status by filing a Form 10 registration statement that is declared effective by the SEC and complying with certain additional requirements:
- the company no longer be a shell company;
- the company must be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
- the company must have filed all reports and schedules required by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
- the company must have filed current “Form 10 information” reflecting that it is no longer a shell company.
For further information about Form 10 effectiveness or Form 10 registration, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855