Form 10 Registration

Registration Statements on Form 10 (“Form 10”) register a class of securities under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”). Unlike securities registered under the Securities Act of 1933 (the “Securities Act”), registration on Form 10 will not cause the company’s securities to become unrestricted.

Registering securities on Form 10 will cause the company to be subject to the periodic reporting requirements of the Exchange Act.

Which issuers can register securities on Form 10?

All issuers can register securities on Form 10.

When are issuers required to file a registration statement on Form 10?

A.  Issuers with over $10,000,000 in total assets and 750 or more record holders must file a registration statement on Form 10.

Can an issuer voluntarily file a registration statement on Form 10?

Yes, an issuer can voluntarily file a Form 10.

When will a Form 10 registration statement become effective?

Form 10 registration statements become effective automatically sixty days after the initial Form 10 filing date.

What are the consequences if a Form 10 registration statement becomes effective?

The company becomes subject to the reporting requirements of the Exchange Act when the Form 10 becomes effective.  This obligates the company to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.  Additionally, the company becomes subject to the SEC’s proxy rules and the company’s management and shareholders become subject to the beneficial reporting requirements of Sections 13 and 16 of the Exchange Act.

Does the filing of a Form 10 registration statement result in the assignment of a ticker symbol?

No. A Form 10 registration statement will not cause a company’s stock to be traded on an exchange or any quotation service such as the OTC Markets and a Form 10 will not result in the assignment of a ticker symbol.

How does a company obtain a ticker symbol after filing a registration statement on Form 10?

A ticker symbol is assigned by FINRA and not the SEC.   Generally, among other things, the Company must have approximately 20 shareholders with unrestricted shares who hold an aggregate of at least 250,000 shares.

Does Form 10 information satisfy the informational requirements of SEC Rule 15c-211?

If the issuer provides the information required by Form 10 and the information is complete and current then the issuer has satisfied SEC Rule 15c-211.

What is a shell company?

A shell company is an issuer with no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents or assets consisting of any amount of cash and cash equivalents and nominal other assets.

If a non-reporting company was a shell company ten years ago,  is it required to register a class of securities on Form 10 to cure its shell status before its shareholders can rely on Rule 144’s safe harbor?

Yes, if a non-reporting entity was a shell company at any time during any time its history, the company must register a class of securities on Form 10 pursuant to the Exchange Act or its stockholders cannot rely upon rule 144’s safe harbor.

How does an issuer cure shell company status for purposes of Rule 144?

An issuer can cure shell company status by filing a Form 10 registration statement and complying with certain additional conditions.  These requirements are that:

• the company no longer be a shell company;
• the company must be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
• the company must have filed all reports and schedules required by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
• the company must have filed current “Form 10 information” reflecting that it is no longer a shell company.