Consequences when private company exceeds 12(g)(1) limitations

[Guest hapa123]

Sections 12(g)(1)(A) and (B) of the '34 Act generally provide that a private company is subject to the reporting requirements of the Secion 12(B) of the Act if it "has total assets exceeding $1,000,000 and a class of equity security held of record by [500 or more persons]." Thus, a private company will essentially be subject to the same reporting requirements as a public company upon exceeding the 12(g) limitations. Does anyone know of any articles or publications that provide a thorough discussion and analysis of these limitations?

[Kirk Maldonado]

Read Tax Management Portfolio #362, Securities Laws Aspects of Employee Benefit Plans.

[Guest hapa123]

In the most recent corporate counsel, an article notes that private companies that inadvertently exceed the limitations of 12(g)are essentially subject to public company reporting requirements. The author, however, implies that in most cases private companies will not be subject to 12(g), and mentions that SEC no-action letters support this position. The author fails to mention that the relevant no-action letters concerned plans whose terms are not common to most stock option plans. I believe 12(g) has significant ramifications for companies who exceed its limitations, and should not be so easily dismissed.