Houmu Holdings Ltd (HOMU)

[oldstocks]

The Section 15(d) reporting requirements are scaled down from the Exchange Act reporting requirements for a company with a class of securities registered under Section 12. In particular, a company that is only subject to Section 15(d) need only comply with the Section 13 reporting obligations and need not comply with the federal proxy rules and third-party tender offer rules in Section 14, the officer/director and 10% shareholder reporting requirements in Section 16 or the 5% or greater shareholder reporting requirements in Sections 13(d), (g) and (f) of the Exchange Act.

This blog addresses suspending the duty to file reports under Section 15(d) and determining voluntary filer status. In a separate blog I will discuss the termination of registration under Section 12.

Suspension of Reporting Obligations

The duty to file reports under Section 15(d) can only be suspended and not terminated. To the contrary, registration under Section 12, and accordingly the requirement to file reports as a Section 12 registrant, can be terminated. However, even if a Section 12 reporting obligation is terminated, a Section 15(d) obligation remains, and even if temporarily suspended, can be resurrected when the fact basis for suspension changes.

The duty to file reports under Section 15(d) is automatically suspended: (i) If the company has a class of securities registered under Section 12 of the Exchange Act and is thus separately subject to the reporting requirements due to that registration; or (ii) on the first day of any fiscal year, other than the fiscal year in which a Securities Act registration statement became effective, in which the company has fewer than 300 record security holders.

Exchange Act Rule 15d-6 requires that a company whose duty to file reports is suspended because they have fewer than 300 shareholders as of the first day of their fiscal year-end, file a Form 15 within 30 days of the beginning of the fiscal year to inform the SEC of the suspension of the duty. SEC C&DI confirms that this notice is not a condition to the automatic suspension. In practice, very few companies actually file a Rule 15d-6 Form 15. Moreover, in practice, many companies voluntarily continue to file SEC reports even though the duty to do so has been statutorily suspended.