SEC Form 15
SEC Form 15: An Overview
SEC Form 15 is a voluntary filing with the Securities and Exchange Commission (SEC), otherwise called the Certification and Notice of Termination of Registration. It is involved by companies to revoke their registrations as publicly-traded corporations.
Form 15 is regularly utilized by small companies with a limited number of shareholders who conclude that the expense and reporting requirements of staying a publicly-traded corporation are too onerous. The company's shares will cease trading, while its excess owners might hold or sell their shares privately.
The form additionally might be utilized by companies that have fallen on difficult situations financially and have motivation to fear inescapable and non-voluntary delisting by an exchange.
Figuring out SEC Form 15
SEC Form 15 notifies the SEC that the company filing it doesn't plan to keep on filing the different forms that are required to keep up with its listing as a public company.
A company must have fewer than 300 shareholders to be eligible to file Form 15.
The reporting requirements are nitty gritty in the Securities Exchange Act of 1934. They are broad and can be troublesome for small publicly-recorded firms. A portion of these experience next to no trading of their stock on the public exchange. Ownership might be overwhelmed by a single family or by a small group of investors.
The benefits of being a public company are essentially not worth the time, money, and effort of planning and filing periodic reports to the SEC.
When the voluntary Form 15 is filed, the company is not generally required to make the principal filings required by the SEC. These remember the annual reports for Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. (On account of foreign companies, Form 8-K is replaced with Form 20-F, and Form 6-K).
Certain reporting obligations, like proxy statements, stay in place for 90 days following the filing.
Illustration of a SEC Form 15 Filing
Claw International, Inc., a manufacturer of zippers and apparel fasteners, filed a Form 15 on Dec. 28, 2017, "after a definite analysis and thoughtful pondering of the benefits and disservices of being a SEC reporting company."
Filing Form 15 promptly releases the company from some SEC reporting requirements.
The company's board of directors considered the costs associated with the readiness and filing of reports, including the expenses of outside legal and accounting resources, the amount of management time spent finishing the records, the number of trades of the common stock, and the perspectives on its biggest shareholders.
The resources, the company closed, could be better spent on business operations.
Features
- At any rate, it is sometimes involved by companies in hot water that face fast approaching de-listing.
- Form 15 informs the SEC that a company no longer needs to trade publicly, and therefore will not follow the typical government reporting requirements.
- The form is most frequently utilized by small companies with few shareholders who find the SEC reporting regulations troublesome.
