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Entries tagged “Secondary Markets”

SEC Loosens Control on Shareholder Limit under the Private Company Flexibility and Growth Act

Insight Michael Moradzadeh Michael Moradzadeh · November 01, 2011

This blog post was prepared by Inna S. Wood and Michael Moradzadeh.

The Private Company Flexibility and Growth Act (H.R. 2167), referred to as the “Facebook Rule” by many internet bloggers, was introduced in the House by Rep. David Schweikert (R-AZ) on June 14, 2011. Its main theme is to increase the shareholders of record threshold requiring the mandatory registration of a private company with the SEC from 500 to 1,000 shareholders. The act modifies the original shareholder limit that was established by Section 12 (g) of the Securities Exchange Act in 1964 and has not been revised since. It also exempts accredited investors and employees from that count.

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