SEC Form S-8

SEC Form S-8 allows public companies to register securities it offers as part of an employee benefit plan.

SEC Form S-8 is a short-form registration statement that allows companies to issue shares to employees under certain circumstances upon filing the form with the Securities and Exchange Commission (SEC). Under the Securities Exchange Act of 1933, the SEC requires companies to register securities with the agency before they issue them.

In some cases, the SEC requires less comprehensive documentation for companies with simpler operating structures or for smaller, more targeted issuances of securities. Form S-8 provides such a simplified form for certain situations in which companies issue stock as part of an employee benefit plan, including incentive plans, profit-sharing, bonuses, options, or similar opportunities limited only to a company’s employees, directors, partners, trustees, officers, consultants or advisers. In response to previous abuse of such issuances, the SEC also stipulates that consultants and advisers who receive securities in connection with services provided for direct or indirect promotion of a firm’s stock do not qualify as participating in an employee benefit plan, and firms issuing shares to such consultants or advisers may not use Form S-8 to register such issuances.

Most new issuances require companies to file SEC Form S-1 before a security may be listed on a public exchange. SEC Form S-1 includes a legal prospectus describing the issuance, in addition to details about recent sales of unregistered securities, financial statements, and other information pertinent to a prospective investor.

The SEC requires registration of securities under the Securities Act of 1933 in order to ensure investors get the information they need to properly consider the purchase of a new security and to limit fraudulent practices, material misrepresentations, and other acts of deception. The conceptual basis for these disclosures requires only that companies provide required information as a means for investors to make an informed determination about their purchases of securities. To that end, the SEC requires companies to describe the business they conduct and the assets they own, provide information about the company’s management, and describe the security on offer. The SEC also requires financial statements that have been certified by third-party accountants independent of the company described.

The SEC exempts some offerings from its registration requirement, including small or private offerings, interstate offerings, and securities issued by municipal, state or federal governments. In general, the SEC intends these filings to protect investors from fraud by providing them accurate and sufficient information while balancing the burden placed on issuing entities with regard to reporting. Abbreviated or streamlined forms such as Form S-8 arise from situations in which some investor information required by Form S-1 would not be necessary for prospective investors to make an informed purchase decision.