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#DDAmanda Tip: Why companies file Form 15.

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Zardiw Member Level Grandfathered Member Thursday, 10/17/19 09:07:45 AM
Re: Zardiw post# 1214
Post # of 1328 
#DDAmanda Tip: Why companies file Form 15.

First off many people don't understand what 'deregistering' stock really means.

It does NOT mean the stock will stop trading. Trading will continue as normal.

What it means is the company no longer 'officially' registers the shares with the SEC, but 'unregistered' shares trade exactly the same as 'registered' shares.

Also, the company is then no longer obligated to file reports with the SEC.

The company also will not be revoked by the SEC for lack of filing, etc.

The main reason companies do this is so they don't have to spend a ton of money on accounting to do audited 10K filings, etc. And they save money on legal fees also.

Bottom Line on this is the company wants to spend money on their business plan, instead of auditors, lawyers, etc., and you can view this as a GOOD thing.

Here are reasons one company decided to do this. Most companies have the same reasons.

– The high accounting, legal and administrative costs of preparing and filing periodic reports and other filings with the SEC in comparison to the size of the Company.
– The need for senior management of the Company to devote more time to the business of the Company .
– The need to maintain the confidentiality of sensitive business information that would otherwise require SEC disclosure.
– The already limited trading in the Company's common stock. .
– The fact that current trading prices of the common stock make it unlikely that the Company could effectively use its common stock to compensate employees, raise capital or make acquisitions.


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