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house Bill H.R. 1723

Simplifying SEC Filings and Registration for Small Companies

Argument in favor

Letting small companies reference this SEC form on other registrations and documents will reduce the amount of time they spend on paperwork, so that they can focus on growing their business.

Argument opposed

While this wouldn’t reduce the amount of information disclosed to potential investors, it would make it slightly more difficult to access this information directly from other registrations that reference Form S-1.

What is House Bill H.R. 1723?

This bill would change the Securities and Exchange Commission (SEC) Form S-1 registration statement to allow businesses to incorporate by referencing documents that they have filed with the SEC.

Incorporation by reference -- which is frequently used in wills and administrative law --  in this case means that a company could reference the information it provides in Form S-1 in other legal documents going forward.

Form S-1 requires companies to provide information regarding their plans to use the capital raised by issuing new securities, and give an overview of their business model along with the competition they face.


This legislation wouldn’t change any of the existing disclosure requirements, it simply allows smaller companies with SEC reporting requirements to legally connect their information found in Form S-1 to other filings.

Impact

Small companies registering securities with the SEC that would like to reference Form S-1 on other documents, the SEC.

Cost of House Bill H.R. 1723

A CBO cost estimate is unavailable.

More Information

In-Depth: Form S-1 also provides investors with detailed information about the issuance of the securities, such as pricing and dilution to securities already on the market. The company offering the securities is also required to disclose business between itself and its directors, and outside entities.

This legislation was approved by the House FInancial Services Committee on a unanimous vote of 60 to 0.


Media:

Summary by Eric Revell
(Photo Credit: )

AKA

Small Company Simple Registration Act of 2015

Official Title

To direct the Securities and Exchange Commission to revise Form S-1 so as to permit smaller reporting companies to use forward incorporation by reference for such form.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house Passed July 14th, 2015
    Roll Call Vote 426 Yea / 0 Nay
      house Committees
      Committee on Financial Services
      Investor Protection, Entrepreneurship, and Capital Markets
    IntroducedMarch 26th, 2015

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