What Is the Purpose of a Registration Statement

An abbreviated registration form is the S-3, which is intended for companies that do not have the same ongoing reporting obligations. The SEC Form S-1 is also known as a registration statement under the Securities Act of 1933. In addition, the SEC requires disclosure of all material business relationships between the Company and its directors and outside counsel. Investors can review S-1 deposits online to conduct due diligence on new offerings prior to issuance. A registration statement is a document that provides qualitative and quantitative information to investors that issuers must file with the Securities and Exchange Commission (SEC) in order to offer securities to the public. Part II is not required by law in the prospectus. This section contains recent sales of non-registered securities, vouchers and financial statements. The most common registration statement is Form S-1, which is most commonly filed in an initial public offering (IPO). Other registration statements include Form S-3, which is filed for shelf registrations; Form S-4 filed in connection with business combinations; and Form S-8 filed regarding employee compensation in shares. The SEC Form S-1 is the first new securities registration form required by the SEC for publicly traded companies domiciled in the United States.

Any security that meets the criteria must have an S-1 deposit before the shares can be listed on a national stock exchange, such as the New York Stock Exchange. Companies typically file the SEC Form S-1 in anticipation of their initial public offering (IPO). Form S-1 requires companies to provide information on the proposed use of the proceeds of the capital, describe in detail the current business model and competition, and provide a brief prospectus of the proposed security itself, the pricing methodology and any dilution that will occur with other publicly traded securities. Paragraph 5(a) of the Securities Act prohibits any person from selling a security without a registration statement. The reasoning is that if companies want to sell securities to public investors, they must inform public investors about their company in a registration statement. In particular, the prospectus is the registration statement document that discloses the securities offered and detailed information about the Company`s finances and operations to potential investors. Companies that mislead investors about their offer, whether by omitting or misrepresenting material facts, may be held liable for securities fraud. Section 11 of the Securities Act requires issuers to disclose all material information when issuing securities. The form is sometimes amended if important information changes or if the general conditions of the contract cause a delay in the offer. In this case, the issuer must submit Form S-1/A. The Securities Exchange Act of 1933, often referred to as the Truth in Securities Law, requires these registration forms to be filed to disclose material information when registering a company`s securities.

This helps the SEC achieve the objectives of the law: investors must obtain material information about the securities offered and prohibit fraud in the sale of the securities offered. Any business can use Form S-1 to create a registration statement. Information on how to prepare non-financial information in the registration statement is set out in Regulation S-K. Information on the form and content of the required financial statements is contained in Regulation S-X. In addition to the information specifically requested in Form S-1, your company must also provide any other information necessary to ensure that your disclosures are not misleading. The issuer is liable for material misrepresentations or omissions. Investors review the information provided by a company on its Form S-1 with the SEC to decide whether or not to invest in its stock during an IPO. Securities laws and SEC rules allow certain small and newly listed companies to prepare their disclosures using simplified rules designed to facilitate compliance. Eventbrite, Inc., a global ticketing and event technology platform, completed its IPO in September 2018, valuing 10 million shares at a price of $23. A first Form S-1 was filed in August, followed by five S-1/A applications. The initial filing included a proposed maximum amount the company wished to increase, underwriters, its growth strategies and an explanation of dual share classes.

It also described Eventbrite`s historical business and financial information. SEC staff has issued guidance to assist small businesses in preparing this information for stock IPOs. Form S-1 consists of two parts. Part I, also known as a prospectus, is a legal document that requires information on business activities, use of proceeds, total proceeds, price per share, description of management, financial condition, percentage of business sold by individual holders and information on underwriters. Companies can use the SEC`s Electronic Data Gathering, Analysis and Retrieval (EDGAR) online system to file forms, including Form S-1, required by the SEC. Individuals or businesses must first complete an ID form, an electronic application used to apply for a CIK (Central Index Key) and obtain access codes to submit to EDGAR. EDGAR Filers Quick Reference Guides provide guidance on all required steps, as well as technical specifications and answers to FAQs. Foreign issuers of securities in the United States do not use an SEC Form S-1, but must instead file an SEC Form F-1.