Question

Gillcore is about to go public and begin selling securities. As a new public company, what steps must Gillcore take in order to stay in line with the requirements of the Securities Act?

a)This company must file a registration statement and prospectus with the SEC. b)The company's obligations depend on what type of company it is and what type of securities it is offering. c)As a new public company it does not need to take any special action.

Answer 1

Option B

The obligations depends on what type of company it is and what type of securities it is offering. Usually it is required to be registered by submitting a statement and its prospectus detailing out the description of the company, description of the company's properties and business, a description of the security to be offered for sale, information about the management of the company and financial statements certified by independent accountants.

But not all offerings of securities must be registered with the Commission. Some exemptions from the registration requirement include:

• private offerings to a limited number of persons or institutions;

• offerings of limited size;

• intrastate offerings; and

• securities of municipal, state, and federal governments.

Since we are not sure what the company is, the obligations will depend on what type of securities it is offering.