If a company has assets of over $10 million but trades its stock over the counter, it is nevertheless required to comply with the 1934 Act if it has:
A) 500 or more shareholders.
B) one class of stock with 500 or more shareholders.
C) 500 or more shares of stock outstanding.
D) 500 different investors.

Question

Quizplus · Accepted Answer

The correct answer is B) one class of stock with 500 or more shareholders. According to the Securities Exchange Act of 1934, a company must register with the SEC if it has assets of more than $10 million and any class of its securities is held by 500 or more shareholders. The key factor is the number of shareholders of a class of stock, not the total number of shares or investors.

If a Company Has Assets of Over $10 Million but Trades