Smaller reporting company

The Securities and Exchange Commission divides reporting companies, those that file periodic reports under the Securities Exchange Act of 1934 into different categories based on size, among other factors.^[1] Smaller companies have less stringent reporting obligations, provide less historical financial information, are exempt from some provisions of the Sarbanes-Oxley Act of 2002,^[2] and have more time within which to file their reports. The smallest category of company is known as a Smaller Reporting Company. A Smaller Reporting Company will qualify as such if, as of the last business day of its second fiscal quarter, they have a public float of less than $75 million.^[3] Public float is defined as the shares of their publicly traded common stock that is not held by management and certain large investors. Not all companies that file reports under the Securities Exchange Act of 1934 are publicly traded, and so if a company cannot calculate its public float, then an alternative way to be a Smaller Reporting Company is to have annual revenue of $50 million or less.^[4] Company’s are required to do the analysis each year following their second fiscal quarter and, after a transition period, will then be required to file accordingly.^[5]

References

1. "Securities and Exchange Commission" (PDF). Sec.gov. Retrieved 2013-10-15.
2. Craig Butler. "Smaller Reporting Companies and Section 404(b): Where are We?". The Lebrecht Group. Retrieved 2013-10-15.
3. "Changeover to the SEC's New Smaller Reporting Company System" (PDF). Sec.gov. Retrieved 2013-10-15.
4. "Federal Register | Smaller Reporting Company Regulatory Relief and Simplification". Federalregister.gov. Retrieved 2013-10-15.
5. "Smaller Reporting Company: Compliance and Disclosure Interpretations". Sec.gov. Retrieved 2013-10-15.