Megas World

[mastaflash]

Determining Shareholders of Record

The key factor in determining whether a privately-held company is required to register under Exchange Act is the calculation of the number of its holders of record. A holder of record generally is the person or entity identified in the records maintained by a company (or its transfer agent) as the registered holder of the company’s securities. The record holder may not necessarily be the beneficial owner of the securities (e.g., shares held in street name by brokers on behalf of their clients).

Privately-held companies may issue their equity securities over a prolonged period of time in a series of private offerings and to employees, consultants and agents in connection with compensation arrangements. Those shares are often held directly by the recipient and are not held by a nominee or in street name. As a result, privately-held companies engaged in such offerings and issuances may experience a rapid growth in the number of record holders of their equity securities, especially as a result of those issued in connection with compensation arrangements, which potentially could require a company to register under the Exchange Act before being adequately prepared to take on the resultant obligations. Accordingly, privately-held companies wishing to raise capital by admitting new investors or issuing equity under compensation arrangements must continually monitor their outstanding holdings in order to avoid inadvertently triggering the Section 12(g) registration requirements.

However, in addition to increasing the holder of record thresholds, the JOBS Act also includes provisions that specifically exempt certain securities from the calculation of holders of record for purposes of Section 12(g) of the Exchange Act. For these purposes, the JOBS Act provides that the definition of “held of record” will not include securities held by employees pursuant to certain employee compensation plans or issued pursuant to the crowdfunding exemption from Securities Act registration also established under the JOBS Act.

http://www.carltonfields.com/jobs-act-eases-requirements-for-triggering-secs-exchange-act-registration/

Definition of 'Holder Of Record'
The name of the person who is the registered owner of a security and who has the rights, benefits and responsibilities of ownership. The holder of record for a stock typically has shareholder voting rights and receives dividend payouts if there are any. The holder of record for a bond owns the bond and receives the principal and interest payments. When the owner sells the security, he or she ceases to be the holder of record.

Read more: http://www.investopedia.com/terms/h/holderofrecord.asp#ixzz2DMaCuWpQ