What Is Form 15 and How Does It Work for SEC Filings?
Learn how Form 15 simplifies SEC filing obligations, its eligibility criteria, submission timing, and post-filing requirements for companies and investors.
Companies that no longer want to be publicly traded or wish to reduce their regulatory burden can file Form 15 with the Securities and Exchange Commission (SEC). This form terminates or suspends reporting obligations under the Securities Exchange Act of 1934, allowing a company to deregister its securities.
Understanding the implications of Form 15 is crucial for businesses considering this step, as it affects financial reporting and investor relations.
Eligibility Requirements
A company must meet specific conditions before filing Form 15, primarily based on the number of shareholders of record. Under SEC Rule 12g-4, a company can deregister a class of securities if it has fewer than 300 shareholders. If it has fewer than 500 shareholders and total assets below $10 million at the end of its last three fiscal years, it may also qualify.
Foreign private issuers follow different criteria under Rule 12h-6. They can deregister if U.S. shareholders hold less than 5% of the company’s worldwide outstanding shares.
The type of securities also matters. Companies can file Form 15 for equity securities registered under Section 12(g) of the Securities Exchange Act of 1934 and debt securities registered under Section 12(b) or Section 15(d). If a company has issued public debt, it must ensure that fewer than 300 holders remain before filing. If it recently conducted an offering under the Securities Act of 1933, all reporting obligations from that offering must be met.
Information Included
Form 15 requires specific details to justify deregistration. It begins with basic company information, including the registrant’s name, SEC file number, and the class of securities being deregistered.
A key section of the filing is the legal basis for deregistration. Companies must cite the applicable SEC rule, such as Rule 12g-4 for equity securities or Rule 15d-6 for debt securities. Any misrepresentation could lead to enforcement actions.
Companies must also specify whether they are terminating or suspending reporting requirements. Termination is permanent, while suspension applies only as long as the company remains below the shareholder or asset thresholds. If shareholder numbers rise due to a merger or private placement, the company may need to resume SEC reporting.
Timing of Submission
Once Form 15 is filed, the company’s obligation to submit periodic reports, such as Forms 10-K and 10-Q, is immediately suspended. However, the SEC can review and revoke the suspension if the company does not meet eligibility criteria.
Companies often time their submission to avoid unnecessary filings. If a company qualifies for deregistration before its annual report is due, filing Form 15 in advance can eliminate the need for that report, reducing compliance costs. If filed mid-quarter, interim financial disclosures may still be required until the SEC formally acknowledges deregistration.
Amendments and Extensions
Errors in a Form 15 filing may require amendments. If a company misstates its eligibility or omits necessary details, it can file a Form 15/A to correct the mistake. If the SEC identifies an issue, it may request additional information or reject the filing, reinstating reporting obligations.
Extensions are not granted for Form 15 since filing is voluntary. However, if a company is close to meeting eligibility requirements but has not yet fallen below the required shareholder count or asset level, it may delay filing until conditions stabilize.
Reporting Requirements After Filing
Once Form 15 is submitted, a company’s reporting obligations change, but some responsibilities may remain. While periodic SEC filings such as Forms 10-K, 10-Q, and 8-K are suspended or terminated, companies with public shareholders may still need to provide financial disclosures through other means, such as private reports or compliance with state securities laws.
If a company remains listed on an exchange, it must still follow that exchange’s reporting and governance requirements.
If shareholder or asset levels later exceed deregistration thresholds, the company may need to re-register its securities and resume SEC reporting. This can happen if new investors acquire shares through private placements, mergers, or secondary market transactions. If re-registration is required, the company must file a new registration statement, such as Form 10 or S-1, and comply with all applicable disclosure rules before returning to public markets.