Saturday, July 5, 2014

The Laws That Apply to a Direct Public Offering

Direct Public Offering Blog Series
An issuer conducting a registered direct public offering is subject to three federal securities laws, each with its own unique requirements.  These are the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”) and the Sarbanes-Oxley Act of 2002 (”Sarbanes-Oxley”).

In addition to these laws, state laws apply to direct public offerings.  These include state securities and corporate laws. 
Federal Laws Applicable To Direct Public Offerings
The Securities Act regulates the offer and sale of securities by both private and public companies. Its requirements apply to both private offerings under Regulation D and registered direct public offerings on Form S-1.
Upon completion of a registered direct public offering, the Exchange Act imposes periodic reporting obligations. These obligations include the filing of Form 10-K, 10-Q and 8-K.
For issuers who register a class of securities under the Exchange Act, additional reporting obligations apply. These include the SEC’s proxy rules that require disclosures be made on Schedules 14A or 14C and certain procedures for the solicitation of shareholder votes.  Additionally, shareholders and management must file beneficial ownership reports of their trading activities in the company’s securities.
In addition to imposing, disclosure obligations, the Exchange Act Rule 15c2-11 requires that public companies provide certain public information before a market maker may enter quotations of the issuer’s securities.  Rule 15c2-11 disclosures enable market makers to publish quotations in a company’s securities in the secondary market after a direct public offering has been registered and/or completed.
The Sarbanes-Oxley Act of 2002 establishes corporate governance, corporate accountability and accounting oversight provisions that apply toSEC reporting companies.
State Laws Applicable To Direct Public Offerings
At all times during the registered direct public offering process, the issuer is subject to the corporate laws where it is domiciled.   State corporate laws regulate the creation, organization and dissolution of corporate entities.  State corporate laws require articles of incorporation to document the company’s creation and to provide provisions regarding the management of the corporate entity. Most state corporate laws require the company to adopt bylaws to define the rights and obligations of officers, shareholders, voting groups and other matters.
The state securities laws of the individual states also regulate private and public securities offerings unless the offering is preempted under federal law. Even where offerings are preempted under federal law, states may impose filing fees and notice filing requirements. These filing and notice requirements are imposed by most states for Regulation D offerings.
For further information about the laws that apply to direct public offerings, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton Florida, (561) 416-8956, by email at or visit   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information about going public and the rules and regulations affecting the use of Rule 144, Form 8K, crowdfunding, FINRA Rule 6490Rule 506 private placement offerings and memorandums, Regulation A, Rule 504 offerings, SEC reporting requirements, SEC registration statements on Form S-1 IPO’s, OTC Pink Sheet listings, Form 10 OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Going Public Lawyers
Brenda Hamilton, Direct Public Offering Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855

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