Registration by Filing
Registration by Filing (also known as Registration by Notification) is an option for issuers that have registered a security federally. If the issuer meets certain conditions, they may register on the state level by providing the state with certain basic information and documentation. What you really will need to know is that this type of filing is for established companies that have already registered a security with the SEC.
A security registered under the Securities Act of 1933 may only register by filing if the following conditions are met:
- • the issuer is organized under U.S. laws, is organized under the laws of a state, or has an agent in the U.S. for service of process
- • the issuer has been in business in the U.S. for the past 36 months and has filed all their materials with the SEC for the last 36 months
- • the issuer has a security registered under the Securities Exchange Act of 1934 held by at least 500 shareholders
- • there have been 4 market makers in the security registered under the Securities Exchange Act for a period of at least 30 days during the 3 months preceding the offering of the security being registered
- • if the security being registered is an equity security, it must be offered at no less than $5 per share*
* The requirements listed above are only some of the requirements for registration by filing. The law also requires the following:
- • the issuer either has a net worth of $4,000,000, or has a net worth of $2,000,000 and net pretax income from operations before allowances for extraordinary items for at least 2 of the 3 preceding fiscal years
- • the public holds at least 400,000 shares of the issuer’s security registered under the Securities Exchange Act
- • underwriters, officers, and directors must not hold warrants or options on over 10% of the shares of the security being registered
- • the underwriters and broker-d