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Deregistration: Form 15
Notwithstanding the increased liability to officers under recent legislation, companies may elect to deregister securities rather than face certifications to the correctness of their SEC filings thereby cuting off head-on any potential claims that the Company is not fully forthcoming in its financial reporting. If your company is considering reaching this decision, consider the information in this exhaustive four page tome with respect to the advantages and disadvantages of deregistering. A Detailed Look at the Process of Deregistration Are you considering that your company may be best served by deregistration? The benefits of decreasing certain expenses and freed up management and personnel to remain more focused on operating your company rather than satisfying the increasingly burdensome securities law reporting requirements may warrant such a decision. In addition, small trading volume and virtually no following on Wall Street and the hope that the widespread recognition of your company coupled with consistently mediocre financial performance, might never lead to the development of a deeper and more active market for your shares. Reluctantly, therefore, your company may be concluding that shareholders will, in the long run, be better served by lower expenditures for SEC compliance than by maintenance of what has, at best, been a desultory public market for its shares. So as to provide adequate understanding of the process before making a decision about the potential diminution of liquidity for your shareholders, you need to better understand the process. Why do companies want to deregister? The Sarbanes-Oxley Act is bringing a change to the landscape of the financial markets. With the elimination of the OTCBB and the establishment of the BBX, many public companies are evaluating their positions as publicly traded entities. Many companies do not want to go through the time and expense required to prepare the reports required by the Securities Exchange Act of 1934. This exercise is particularly cumbersome if a company is distressed due to a lack of funds and/or other capital resources. Since deregistration results in an inability to list its securities on an exchange or Nasdaq, a company should consider the effects of the loss of a liquid market in its securities before deregistering. Should companies deregister? Like any major corporate decision, deregistration has both positive and negative aspects. [continued...] Want to know more? Download the White Paper "Deregistration: Form 15" for just $9.95. People who ordered this paper also ordered: |
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