What is Rule 405 of the Securities Act?
Under clause (2) of the definition of ineligible issuer in Rule 405 of the Securities Act, an issuer shall not be an ineligible issuer if the Commission determines, upon a showing of good cause, that it is not necessary under the circumstances that the issuer be considered an ineligible issuer.
What is a shell company Rule 144?
Rule 144(i)(1) defines a shell company as a company that has: (A) No or nominal operations; and. (B) Either: No or nominal assets; Assets consisting solely of cash and cash equivalents; or.
What is an ineligible issuer?
The issuer is, or during the past three years the issuer or any of its predecessors was: a blank check company; a shell company, other than a business combination related shell company; or. an issuer in an offering of penny stock.
What is an affiliate under SEC rules?
The term “affiliate” is defined in Rule 405 under the Act as a “person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with,” an issuer.
What is a 425 filing?
Form 425 is a document prepared by companies and filed with the SEC disclosing information related to their business combinations, whether that is through a merger or an acquisition.
Who is an affiliate for Rule 144?
Rule 144 at (a)(1) defines an “affiliate” of an issuing company as a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such issuer.”
What is the purpose of Rule 144?
Rule 144 allows public resale of restricted and control securities if a number of conditions are met. This overview tells you what you need to know about selling your restricted or control securities. It also describes how to have a restrictive legend removed.
What is a Section 16 officer?
Section 16 Officer means every person who is directly or indirectly the beneficial owner of more than ten percent (10%) of any class of any equity security (other than an exempted security) which is registered pursuant to Section 12 of the Securities Exchange Act of 1934.
What is SEC Form s3?
SEC Form S-3 is a regulatory filing that provides simplified reporting for issuers of registered securities. An S-3 filing is utilized when a company wishes to raise capital, usually as a secondary offering after an initial public offering has already occurred.
Does the Securities Act of 1933 still exist today?
The Securities Act of 1933 is governed by the Securities and Exchange Commission, which was created a year later by the Securities Exchange Act of 1934. Several amendments to the act have been passed to update rules numerous times over the years, with the latest enacted in 2018.
Does Rule 144 apply to shell companies?
By: Brenda Lee Hamilton, Attorney Hamilton & Associates Law Group In recent years, the Securities and Exchange Commission (the “SEC”) has published releases relating to Shell Companies that affect the use of Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), by shareholders of Shell Companies.
What are the rules for secsec for shell companies?
SEC Rules Affecting Shell Companies. a shell company formed by an entity that is not a shell company solely for the purpose of changing that entity’s domicile solely within the United States; or a shell company formed by an entity that is not a shell company solely that among one or more entities other than the shell company,…
Are there any limitations on business combination related shell companies?
See Securities Act Rule 405 and Exchange Act Rule 12b-2. [4] These limitations do not apply to “business combination related shell companies”—that is, shell companies that are used in certain change of domicile or business combination transactions. See Securities Act Rule 405 and Exchange Act Rule 12b-2.
What is a shell company under the Securities Act?
A shell company, as defined in Rule 405 of the Securities Act, is an issuer with no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of cash and cash equivalents and nominal other assets.