SEC Form 15-12B

What Is SEC Form 15-12B?

SEC Form 15-12B is a certification of termination of registration of a class of security under Section 12(g) or notice of suspension of duty to file reports as per Section 13 and 15(d) of the 1934 Securities Exchange Act Section 12(b). This form is utilized when a company goes private and must register existing securities.

How SEC Form 15-12B Works

Under Section 12(b) of the Securities Exchange Act, when an issuer files to register their security with the Securities Exchange Commission (SEC) they must give relevant financial data. This data might remember information for the corporate structure and management compensation along with the balance sheets and profit/loss statements from the past three years.

At the point when a company files Form 15 or goes dark, it can suspend these reporting obligations as long as it doesn't have in excess of 300 shareholders of the deregistered class of securities on the primary day of any fiscal year after it has filed Form 15. SEC Form 15-12B is filed by companies with a Commission File Number prefix of 001-.

Why Companies "Go Dark"

Companies "go dark", or intentionally delist their shares from exchanges when the costs of staying a public reporting company and remaining listed on the national securities exchange offset its benefits. To do as such, the issuer must likewise unregister these securities as indicated by the Securities and Exchange Act of 1934

For instance, during the Great Recession of 2008-2009, numerous more modest publicly traded companies went dark or considered going dark, in response to the rising financial burden of staying a public reporting company. For more modest companies especially, the costs of keeping up with listing requirements and public reporting requirements can turn into a burden during troublesome financial times. Delisting and deregistering permit a striving company to divert its decreasing resources from SEC reporting and listing requirements.

Special Considerations

Delisting alone doesn't let a company free from its public reporting requirements; it must likewise deregister its shares as required by the Exchange Act. A non-listed company might have reporting obligations to the SEC. All frequently, a company might go through a going private transaction, in which it cashes out most or its public shares to start the method involved with going dark. Going private can happen by means of a merger, a reverse split of the company's shares, or a tender offer.

A company that goes private doesn't have to cash out its shareholders, and for sure, many such companies don't have the liquid funds to do as such. Nor does such a company need to initially put the make a difference to a shareholder vote or accommodate a fairness opinion. Be that as it may, a few companies might furnish shareholders with a stock repurchase, tender offer, or one more offer of liquidity.

Features

• A company that goes private can choose for stop giving certain information to the SEC, conditional that it has something like 300 shareholders toward the beginning of the fiscal year subsequent to filing for delisting.
• A company that decides to willfully delist and deregister securities under the Securities and Exchange Act must file Form 15-12B with the SEC
• Companies deregister securities when it turns out to be financially restrictive to stay a public reporting company and remain listed on a national securities exchange.