Companies that are "reporting companies" under the federal securities laws must file periodic reports on EDGAR. In addition, "control persons" of a reporting company must file their own reports separate from the company's.

What is a reporting company?

A company can become "reporting" voluntarily or involuntarily, in a couple of ways. Section 12(g) of the Securities Exchange Act of 1934, as amended, requires a company to file a registration statement under that Act within 120 days when, on the last day of any fiscal year, the company's securities are held of record by at least 500 persons AND the company has total assets exceeding $10,000,000. Section 12(b) of the same Act mandates registration of the company's securities if it desires to list them for trading on a securities exchange, regardless of assets or shareholders.

In either event, the filing of the registration statement makes the company -- as well as its "control persons" -- subject to the periodic reporting requirements under Section 13(a) of the Securities Act of 1933. The reporting obligation commences on the day the registration statement becomes effective, typically 60 days after the date of filing unless a stop order or other administrative order is in effect. Regulation 13A specifies the filings required by the Commission under Section 13(a) (see below).

Often, a company will voluntarily file a Section 12(g) registration statement even though it has fewer than 500 shareholders and less than $10,000,000 in assets. Small but growing companies may perceive various advantages to becoming "fully reporting," for example when an IPO, private placement or other financing is being planned, or the company wants to use its equity stock to negotiate for acquisitions. Voluntary registration imposes all of the same reporting requirements as mandatory registration.

The other way a company can become reporting is to register securities for sale to the public under the Securities Act of 1933, as in an IPO. In this case, the reporting requirements kick in as soon as the registration statement is effective.

What is a control person?

In securities regulation, the concept of "control" can have a somewhat amorphous character. For reporting purposes, however, a shareholder (whether or not a "natural" person) has a "control position" whenever the shareholder owns more than 5% of a class of the company's securities. Anyone acquiring a control position must file a report of the transaction under Regulation 13D.

Control can also include people who are part of certain groups that may be presumed to act together, such as members of a voting trust, or family members who live together. Thus, even if you own less than 5% of a class of security, you are considered a control person if you're part of a "control group."

"Insiders" are officers, directors and affiliates of the issuer. Because of their obvious influence on the affairs of the company, insiders are required to report changes in their stock positions even if the amount of securities involved does not constitute a "control" position.

Reports and Forms Required

Several rules prescribe reports to be filed by reporting companies, insiders and control persons. Following are the most common reports and the required forms:

• Form 10-K -- Annual Report to Shareholders. A detailed overview of the company, filed within 90 days of fiscal year-end. Includes an audited financial statement.
• Form 10-Q -- Quarterly Report. Primarily an "interim" financial statement (unaudited), but also reports any significant developments since the last periodic report.
• Form 10-KSB -- Annual Report by Small Business Issuer
• Form 10-QSB -- Quarterly Report by Small Business Issuer
• Schedule 13D -- Report by any person or group who acquires a beneficial ownership of more than 5% of a class of registered equity securities of certain issuers. Due within ten days after the acquisition. Must be amended to reflect any material changes in the information reported.le 13D.
• Schedule 13G -- An abbreviated version of Schedule 13D available for use by a limited category of "persons" (such as banks, broker/dealers, and insurance companies) when the securities were acquired in the ordinary course of business and not with the purpose of influencing the control of the issuer.
• Form 3 -- Initial Statement of Beneficial Ownership of Securities. Initial report filed by any officer, director, or over-ten-percent owner of the company's securities after securities are acquired or when company initiates reporting.
• Form 4 -- Statement of Changes in Beneficial Ownership of Securities. Like Form 3, but to report changes.
• Form 5 -- Annual Statement of Benenficial Ownership of Securities. Filed once each fiscal year.
• Form 8-K -- Current Reports. To be filed by the company within 10 days of the occurrance of certain significant events, such as changes in control, mergers and acquisitions, or a change in the company's auditing accountants.
• Form 11-K -- Annual Reports of Employee Stock Purchase, Savings and Similar Plans
• Schedule 14-D1 -- Tender Offer Statement. To be filed by a person making a tender offer for securities of a reporting company, when the securities if tendered would give the offeror more than 5% of that class of securities.
• Schedule 13-E4 -- Issuer Tender Offer Statement. Used to report certain offers by a company to repurchase its own securities.
• Form 144 -- Notice of Proposed Sale. This form must be filed for intended sales of restricted securities or securities held by an affiliate of the issuer in reliance on Rule 144 when the amount to be sold during any three month period exceeds 500 shares or units or has an aggregate sales price in excess of $10,000.
• Form S-8 -- This is an abbreviated registration statement form for securities to be issued to employees of the issuer under an employee benefit plan.