Registration Statement Printing
If your company would like to sell its securities, you must first print a registration statement and then file it. This statement alerts the SEC (Security Exchange Commission) and potential investors that your company is planning on selling stock. The format provided by the SEC rules is a form (form F-1 for businesses over twenty five million dollars in annual revenue and form SB-1 for businesses than have had under twenty five million dollars in annual revenue), but the statement should not be filed in fill-in-the-blank format. The statement must provide accessible information for the public in a readable medium, much like a brochure.
In this statement, the following information must be outlined:
- Names of directors and officers and their levels of compensation
- Your primary business
- The properties of your business
- Information on your company's competition
- Details of transactions between officers, directors and the company itself
- Proceedings of legal nature which occurred between officers, directors and the company itself
- A proposal depicting how the securities will be distributed
- A plan explaining the predicted use of the monetary gains from the offering
- Detailed information about your proposed stock offering such as how many and what kind of shares you plan on offering.
SEC rules explain exactly how this information should be communicated. The statement must include supplemental financial statements, all of which must be certified and audited by an accountant who is both impartial and certified as a CPA. The statement must be printed in English.
Furthermore, your company must make sure the registration statement discloses any and all information that will give a total picture of the health of the company. Especially important is the disclosure of risks such as the following:
- Negative economic conditions in a specific industry related to your company's realm of business
- Poor market conditions for the securities offered
- Reliance on specific personnel, in case of changes in personnel that may affect the securities or stability of the company adversely
- Shaky or unstable operating history
- Any major changes in your company's officers, directors, or financial standing in recent history
The paperwork is extensive and complicated, so many companies prefer to have an outside source create and print the registration statement for them. After the registration statement is created and printed, it must be filed. The information on the statement is available for public examination as soon as it is filed, but your company cannot actually offer securities until after the SEC approves the filing.
