What is a shelf registration?

Police registration is a process that makes it easier to issue and sell new shares to US registered office companies. The system includes submission of a single document that then allows you to issue stocks at any time in the next two years. There are strict rules that the company must meet to qualify for the system. The system cannot use companies that have not yet issued stock or other securities. Normally, every problem would have to go through a fully and lengthy legal process. This may be a special burden if the company needs to raise money by issuing new shares because it would normally face a delay before it would be allowed. When registering the shelf, the legal process is completed in advance and the same registration document can be reused whenever it is needed in a two -year period.

Another advantage of Police registration is that the company allows more flexibility to timing the problem with stock. This could make it possible to take advantage of the attitudes between potential investors. For example AKCIE Medical companies can find few buyers as a result of a large scandal over medicine. This could change later if scientists had a breakthrough in the treatment of the main illness. Being able to issue shares without delay could earn this change in the field, which may temporarily interest investors about buying medical stocks.

The Securities and Stock Exchange Commission (SEC) introduced the shelf registration in 2005. The name is based on the idea that the submission documents were waiting "on the shelf" until the company decides to issue shares. This should not be confused with the company "outside the shelf" that is created and stated through the process of legal registration, but has no real activity. Instead, Tje's type of company is later sold to people who want a hassle -free way to turn an existing company into a company.

Companies that want to use shelf registration must be classified as a "well -known seasoned investor". To obtain this classification, the company must either have$ 700 million in the US (USD) or greater market capitalization, which is the number of shares in the company multiplied by the current share price, or had to issue a total of $ 1 billion USD for certain types of securities in the last three years. The company must also meet all SEC requirements in the previous year.

Police registration is most often associated with the problems of ordinary shares. It can also be used for preferred stocks, which usually offer priority treatment when receiving dividends and has a greater guarantee that some money will get back if the company is liquidated. Registration can also cover debt securities such as bonds.