Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Law, Transactions, & Risk Management
  • Business Transactions, Antitrust, & Securities Law

Requirement to Register Securities Under 1934 Act - Explained

Reporting and Non-Reporting Companies

Written by Jason Gordon

Updated at September 25th, 2021

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

When must a company register with the Securities Exchange Commission pursuant to the 34 Act?Discussion QuestionPractice QuestionAcademic Research

When must a company register with the Securities Exchange Commission pursuant to the 34 Act?

A company issuing securities must either register or perfect and exemption from registration. There are, however, other situations that subject a company to SEC public reporting requirements. The company becomes known as a reporting company. A company is generally required to register with the SEC if it meets any of the following characteristics:

  • it completes a public offering pursuant to the 33 Act;
  • securities of the company are traded on a national exchange (such as the NYSE or CME); or
  • it has 2,000 or more total shareholders (or 500 or more unaccredited shareholders) of unrestricted securities and a total asset value of more than $10 million.

The 2,000 (or 500 unaccredited) shareholder rule does not apply to shareholders who acquired shares through sanctioned crowdfunding or pursuant to employee compensation plans. Notably, if an issuer later drops below the shareholder limitation numbers, it may apply to the SEC to be exempted from the 34 Act reporting requirements.

Next Article: Reporting and Disclosure Requirements under '34 Act Back to: SECURITIES LAW

Related Topics

  • The Security Exchange Act of 1934
  • When must an issuer register pursuant to the 34 Act?
  • What disclosures are required of reporting companies under the 34 Act?
  • What is liability under Section 10(b) and Rule 10(b)(5)?
  • What is insider trading under Rule 10(b)(5)?
  • What damages are available under Section 10 and Rule 10(b)(5)?
  • What is insider trading under Section 14 of the 34 Act?
  • What is liability under Section 16 of the 34 Act?
  • What is liability under Section 18 of the 34 Act?
  • What is criminal liability under the 34 Act?

Discussion Question

Why do you think the SEC requires a company to register in the above-referenced scenarios? Do you think the size of the company (number of shareholders or value of assets) should determine whether reporting is required? Why or why not?

Practice Question

ABC Corp is a private company that has been steadily growing over the past several years. They have gone through several private offerings and have a large number of accredited and unaccredited investors. They also have substantial land holdings as well as equipment. Under what conditions might ABC Corp be forced to registered with the SEC and become a reporting company?

Academic Research


register securities 1934 act

Was this article helpful?

Yes
No

Related Articles

  • Bid Rigging - Explained
  • Venture Capital Investment - Explained
  • Warrant Coverage (Stock) - Explained
  • Initial Public Offering (IPO) - Explanation



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand