Whats the difference between a Form S-1 and a Form 10?
In short, a Form 10 is used to register a class of securities (ex. common) under Section 12(b) or (g) of the Securities Exchange Act of 1934 while the Form S-1 is used to register specific shares of the company or its current shareholders shares for sale/resale and subjects the Company to the reporting requirements of Section 15(d) Securities Exchange Act of 1934.
But what does that mean to you if you are looking to “go public?”
- Filing a Form 10 does not “take you public.” A Form S-1 would have to be filed following the Form 10 if you want to register specific shares for investors and others to purchase; enabling a trading market.
- Any company whether public or not can use a Form 10 to register a class of securities.
- a Form 10 automatically becomes effective 60 days following filing, regardless of any outstanding comments from the SEC reviewer.
- Upon effectiveness, the Company is subject to the SEC’s reporting requirements; meaning they must file annual reports on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K.
- The Company is also subject to the proxy rules of Section 14.
- A Form S-1 or Registration Statement is used for an Initial Public Offering (IPO), Direct Public Offering (DPO), Selling Shareholder, Private Investment in Public Equity (PIPE) or Equity Line.
- The S-1 registers and offers specific shares for sale to the public, thus “taking the company public.”
- Upon filing of the S-1, the SEC will issue comments within 30 days. It is not effective until all the comments are answered to the satisfaction of the reviewer. This may take 3 to 6 months (or greater), depending on the breadth and number of comments.
- Upon effectiveness, the company is subject to reporting requirements; meaning they must file annual reports on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K.
- Effectiveness enables the Company to apply for listing on an OTC Markets Board or other Exchange.
If you are considering going public by way or reverse merger with an existing shell it is important you know the difference between a Form 10 company and a shell that has filed an S-1. It will make a difference in the filings and steps that need to be taken.
Author: Jennifer Trowbridge, Stoecklein Law Group, LLP