Purpose:
- SEC Form 15-12G is filed by companies to voluntarily terminate the registration of their securities under Section 12(g) of the Securities Exchange Act of 1934.
- This form is used by companies that no longer meet the requirements for mandatory registration, which is typically tied to the number of shareholders or asset size.
- By filing Form 15-12G, a company ceases its obligation to file periodic reports, such as Forms 10-K, 10-Q, and 8-K, with the SEC, significantly reducing the regulatory burden.
Filing Requirement:
- Companies are eligible to file Form 15-12G when they meet certain criteria for deregistration:The company has fewer than 300 record holders of the class of securities being deregistered.Alternatively, if the company has fewer than 500 record holders and its total assets do not exceed $10 million at the end of the most recent fiscal year.
- The company has fewer than 300 record holders of the class of securities being deregistered.
- Alternatively, if the company has fewer than 500 record holders and its total assets do not exceed $10 million at the end of the most recent fiscal year.
- The form is typically filed by companies that no longer wish to be publicly traded or have reduced their shareholder base as part of a strategic decision to go private or downsize operations.
Process:
- Filing Deadline: The company can file Form 15-12G at any time once it meets the eligibility requirements for deregistration.
- Immediate Suspension of Reporting: Upon filing, the company’s obligation to file SEC reports, such as the 10-K and 10-Q, is immediately suspended, unless the SEC raises objections.
- Form Contents: The form requires basic information about the company, the securities being deregistered, and a certification that the company meets the criteria for deregistration under Section 12(g).
Importance for Companies:
- Cost Savings and Operational Efficiency: Filing Form 15-12G allows companies to reduce the administrative costs associated with SEC reporting and compliance. Smaller companies, in particular, can benefit from the relief of ongoing filing obligations.
- Strategic Flexibility: The deregistration process gives companies the flexibility to exit public markets and potentially restructure, merge, or go private without the regulatory complexities of being a public reporting company.
- Regulatory Relief: Companies no longer need to prepare and submit periodic reports, proxy statements, or other filings required under Section 12(g), easing the operational burden and freeing up resources for other business needs.
Conclusion
SEC Form 15-12G is an important tool for companies seeking to terminate the registration of their securities under Section 12(g) of the Securities Exchange Act. By filing this form, companies can suspend their SEC reporting obligations, reduce compliance costs, and simplify their operations.