Founders often run into similar questions and curiosities. Below is a log of frequently asked questions addressed by our lawyers, many of whom have been in your shoes.
- When does a public company have to file a Form 8-K with the Securities Exchange Commission?
A Form 8-K is typically due within four business days of an 8-K filing event except for certain exceptions. For a list of 8-K filing events and other helpful information see Desktop Reference: 8-K Filing Events.
- When does a public company have to file its periodic reports?
When a public company has to file its period reports depends on what type of filer the company is considered and its fiscal year end date. For a list of the periodic report filing dates for filers with year ending December 31, 2016 see Desktop Reference: 8-K Filing Events.
- What is a public company annual shareholder meeting and what goes on at one?
US public company charter documents, corporate law of the company’s state of incorporation, and US federal securities laws require US public companies to hold a meeting of shareholders at least once each year. Holding an annual meeting of shareholders, however, is much more than merely fulfilling a legal requirement. The annual meeting allows shareholders to express a judgment on management’s stewardship of the company, allows management to obtain shareholder approval of important matters, and provides a forum for management and shareholders to discuss the progress and direction of the company’s business.
For more on how to prepare for an annual meeting see the Annual Meeting Handbook (2016 Edition).
- If a corporation is preparing an offering, when do the corporation’s financial statements go stale?
When a corporation’s financial statements go stale depends on what type of filer the company is considered. To determine when financial statements go stale for 2017 offerings see the Desktop Staleness Calendar for 2017 Offerings.
- Who is subject to Section 16?
Section 16 of the Securities Exchange Act of 1934 sets out the definition of “Insiders” within publicly traded companies. The following people qualify as Insiders subject to Section 16:
- Directors of the company
- Officers, including each executive officer of the company and, if there is no principal accounting officer, the controller
- Beneficial owners of 10% or more of the company’s securities. A person is deemed to beneficially own securities if, directly or indirectly, that person has or shares the power to vote or sell those securities
For more on Section 16 see Desktop Reference: Summary of Section 16 Rules (Nov. 2015).
- What types of reports do Insiders need to file with the Securities Exchange Commission and what triggers these filings?
Insiders need to file three reports with the SEC:
- Form 3 — the initial report that must be filed when a person becomes an Insider, Form 3 must list all equity securities (including derivatives) of the company that the Insider owns immediately prior to becoming an Insider. If the Insider holds no securities, the Insider must still file a Form 3 reporting no securities owned.
- Form 4 — used to report all transactions by Insiders in the company’s equity securities (including derivatives) that result in a change in beneficial ownership for the Insider.
- Form 5 — if transactions by Insiders eligible for deferred reporting and transactions were not reported on a Form 4, those transactions may be reported on a Form 5 (although all transactions eligible for deferred reporting can and should — as a best practice — be reported early voluntarily on a Form 4).
For more on Section 16 see Desktop Reference: Summary of Section 16 Rules (Nov. 2015).