This post is the seventh and final in a series examining the impact of the Jumpstart Our Business Startups Act (or JOBS Act) one year after its passage and focuses on Titles V and VI of the law and provides some final concluding thoughts.
Titles V and VI of the JOBS Act are closely related in that they both pertain to when private companies must register their securities under the Securities Exchange Act of 1934. Typically, after a startup has gone through multiple rounds of financing and has provided equity compensation to a large number of employees, it finds itself in a position where the number of shareholders it has triggers the requirement to register its securities and begin periodic public reporting of material information, in effect making it a public company. But this transition is not always desired by the company’s management or controlling shareholders. [Read more...]