Company registration: Is it compulsory?
When founding a company or starting an independent activity, many people ask themselves whether they need to be registered on a kind of company register as is the case in many countries. For some countries, this is mandatory, but it isn’t the case for all types of companies in the United States.
Incorporation is the responsibility of the state governments and requirements vary according to state law. Not every company needs to register: If you conduct business as yourself and use your legal name while doing so, you can skip this step. It still may make sense to register though, to not miss out on personal liability protection, legal benefits, and tax benefits. For small businesses, it’s simply a matter of registering your business name with state and local governments before you’re good to go. Once you’ve registered with your state agency, information about your business will then be available online for anyone that wishes to see it.
What is EDGAR?
All public companies must file financial statements with the Securities and Exchange Commission (SEC). Private companies are not required to do so. You can see the latest filings on EDGAR on the U.S Securities and Exchange Commission’s website. EDGAR (Electronic Data Gathering, Analysis, and Retrieval) is an online public database, which performs automated collection, validation, indexing, acceptance, and forwarding of submissions by companies who are required by law to file forms with the SEC. EDGAR aims to make filed documents available to investors online as quickly as possible, as well as to increase the efficiency and accessibility of corporate filings.
How to use EDGAR
In order to submit documents to the EDGAR system, a company first needs to register with SEC (by sending in a Form ID), then they are encouraged to send their business documents in as soon as they can. The SEC has a 5.30pm deadline so documents can be sent up to 3pm the same day and will still usually meet the deadline. How quickly the document is processed depends on its complexity although an EDGAR operator can generally process around 20 pages an hour.
Documents should be sent as Word files although PDFs are acceptable, but can mean that it takes longer to check the first draft. Once the SEC has received all the submissions, it will take 24-48 hours to review and process the request. You will receive an e-mail, stating whether your filing was accepted or not. Alternatively, you can find out on the EDGAR filing website.
The current fee rate (correct as of 2019) is $121.20 per $1,000,000. You can calculate the fee by multiplying the aggregate offering amount by .0001212.
Searching for companies
If you have a specific company in mind that you want to search for, the “Search Companies and Filings” section enables you to retrieve real-time filings for your desired company and to find key information about the business. Documents that you can access include financial statements, descriptions of products and services, annual reviews, annual reports (Form 10-K), and quarterly reports (Form 10-Q).
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