Publicly traded companies are corporations whose shares are traded on a public stock exchange. Public companies are subject to increased regulation that require public disclosures on the business and financial operations of the company. This regulation includes the federal securities laws administered by the U.S. Securities and Exchange Commission (SEC). The SEC's mission is to protect investors, provide for a fair and orderly market, and facilitate access to capital markets. In order to become a public company, a corporation must first register the shares with the SEC by filing a registration statement. The registration process is governed by the Securities Act of 1933 and related regulations. In addition to initial registration, public companies must comply with periodic reporting and disclosure requirements. The form and content of these disclosures are governed by the Securities and Exchange Act of 1934 and its related regulations and forms.
In legal practice, researching SEC filings is involved in a number of tasks like:
The SEC issues forms and updates them regularly. SEC forms have the force of law but are not published in the the U.S. Code or Code of Federal Regulations. The forms prescribe the format and content of the disclosures required under the federal securities laws and regulations. They are not intended to be used as a blank form to be filled in, but should be used as guide for preparing a filing. Forms contain instructions that reference applicable SEC rules, regulations and statutes. Below is a list of the most commonly filed SEC forms. A full list of SEC forms is available on the SEC's website. West Practical Law and Lexis Practical Guidance maintain resources that can help when working on a form check or form drafting assignment.
FORM TYPE | DESCRIPTION |
---|---|
S-1 : Registration Statement | Offering registration of stock or bonds. Most often used for an initial public offering. |
10-K : Annual Report | Most comprehensive overview of a public company. Filed at the close of the fiscal year. |
10-Q : Quarterly Report | Quarterly financial report filed at the end of each fiscal quarter. |
8-K : Current Report | Report of unscheduled material events or corporate changes of importance to shareholders. |
DEF 14A : Proxy Statement | Official notification to shareholders of matters being brought to vote at the annual meeting. Contains executive compensation information. |
In addition to requiring disclosures through SEC form filings, the federal securities regulations also require that companies file documents with the SEC including organizational documents like certificates of incorporation or bylaws as well as material agreements. The documents are filed as exhibits to the form filings. In general, "material" means that an investor would find the information important when making investment decisions. For a more detailed discussion of the materiality standard under the federal securities laws, see Determining Materiality in Securities Offerings and Corporate Disclosure by Practical Law Corporate & Securities.
There is a uniform system for numbering exhibits. For example, every public company's bylaws will be labeled as an Exhibit 3 and a material agreement, like a merger agreement will be labeled as an Exhibit 10. For a table listing the exhibit numbers, the corresponding document type, and the SEC forms with which they must be filed see 17 CFR ยง 229.601.
Documents filed with the SEC as exhibits are a good source for locating precedent to assist with a drafting assignment. For more information on searching for precedent agreements in SEC filings, see the Searching Precedent tab.
SEC filings are only available for public companies, companies with shares listed on a public stock exchange. The most comprehensive filing is the annual report which is filed on Form 10-K. The 10-K provides annual financial statements and analysis of the company's business operations, including a discussion of potential risk factors, liabilities, properties and material legal proceedings. Material agreements and documents are also attached to 10-K's as exhibits. You can also find basic information including state of incorporation, principal place of business, fiscal year, ticker symbol, and the exchange on which the stock is traded. Form 10-K's are updated on a quarterly basis by Form 10-Q's. For more information on Form 10-K's, see this West Practical Law Practice Notes, Form 10-K and Form 10-Q.
The proxy statement, Schedule 14A, is annually distributed to the company's stockholders. It provides information on matters to be voted on at the annual meeting and contains detailed information on executive and board compensation.
A current report on Form 8-K is filed to disclose recent material events. What is considered "material" will vary depending on the specific facts involved. In general, "material" means that an investor would find the information important when making investment decisions. For a more detailed discussion of the materiality standard under the federal securities laws, see Determining Materiality in Securities Offerings and Corporate Disclosure by Practical Law Corporate & Securities.
Form 8-K provides a list of events that trigger the filing of the form. Triggering events include entry into a business combination or material contract, cybersecurity events, a bankruptcy filing or the departure of a director or officer. To review a full list of the events and transactions that trigger a 8-K filing see Events and Transactions Triggering a Form 8-K Filing Chart by Practical Law Corporate & Securities.
A Form S-1 registration statement is filed by U.S. issuers to register all shares that will be offered and sold to the public. The registration statement contains information about the company and the securities offering and is most often filed as part of a company's initial public offering (IPO). Form S-1 has two parts, Part I is the prospectus, which includes information about the company for investors. Part II includes additional information on the offering and other disclosures required by the SEC along with exhibits.
Section 16 of the Securities Exchange Act imposes reporting obligations on certain individuals affiliated with a public company. Officers, directors and shareholders who own more than 10% of a company's securities, commonly referred to as insiders, are required to disclose their transactions involving the company's securities on Forms 3, 4 and 5. For additional information on these forms, see Practical Law Practice Note, Section 16 Reporting: Why, How and When to Do It.
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 require any shareholder that acquires more than 5% of a of company's outstanding securities to file reports on Schedule 13D or 13G containing information about the shareholder and their investment intentions. The Schedules provide investors with information on large acquisitions of a company's stock that could influence a company's management. For more information on beneficial reporting and how it is determined see Practical Law Practice Note, Section 13(d) Beneficial Ownership Reporting