Most companies that sell securities, such as a publicly owned company with stocks available for purchase, need to file reports on forms 10-D, 10-Q, 10-K, 11-K, 20-F, N-CEN, and N-CSR with the U.S. Securities and Exchange Commission. These reports give a detailed analysis of the company’s revenue generation, overall expenses and other relevant data. Sometimes businesses cannot file the reports by the time they are due. In these cases, companies may choose to file an extension, requiring them to fill out SEC Form 12b-25. What is SEC Form 12b-25? How does it work? What happens if companies fail to complete the form? This guide provides answers to these questions.
What Is SEC Form 12b-25?
Businesses may need to file regular reports about their financial concerns with the SEC. These filings provide crucial transparency to a company’s investors, as well as regulators. When businesses cannot file a quarterly or annual report by the deadline date for reasons, such as a failure of a system that generates those financial reports, they may need to file SEC Form 12b-25. This form relates to late filing of reports, such as Form 10-D, Form 10-K,Form 10-Q, Form 11-K, Form 20-F, N-CEN, and N-CSR. The form alerts the SEC that the company is late in filing the report while they look for ways to solve the problem.
Key Components of SEC Form 12b-25
Simply, SEC Form 12b-25 notifies the SEC that an organization will be late in filing a particular report. To avoid penalties or other consequences, companies must file this form within one day after the original deadline. By filing this request for an extension, businesses can get 5 to 15 calendar days added to the deadline for the report, depending on the type.
Form 12b-25 requires companies to explain or confirm several details, including:
- Forms requiring an extension
- Information about the business
- Whether the company can reasonably file the report by the end of the extension
- Reasons for the delay
- Any other late reports from the previous 12 months
- Anticipated changes to the structure or function of the company, even if these changes do not account for the delay
The SEC emphasizes that companies must provide a detailed explanation of the reasons for the delay. Businesses that do not give sufficient detail may receive penalties as a result.
Common Reasons for Filing SEC Form 12b-25
Failing to file reports 10-D, 10-Q,10-K, 11-K, Form 20-F, N-CEN, and N-CSR by the deadline date can lead to fees and other penalties, which companies may want to prevent by filing Form 12b-25. Businesses might need to request an extension for a variety of reasons, including:
- Unexpected circumstances, such as sudden damage to a facility or the abrupt departure of a responsible employee
- Complex financial situations, requiring input from several independent parties or the correction of previous financial reports
- Internal problems, such as a staffing shortage or a failure of critical systems
Providing as much detail as possible for the cause of the delay can minimize the chances of additional scrutiny from the SEC.
Implications of Filing SEC Form 12b-25
Filing Form 12b-25 has a number of implications for the company and its investors besides general compliance with SEC guidelines. Although the form provides a short extension, businesses must still file within the deadline to avoid penalties for late filing. Failing to meet the deadline can lead to additional consequences.
Additionally, these reports are published publicly and can affect the company’s standing in the market. Investors use reports to help guide their investment decisions. A late filing, particularly if the company needs an extension on a regular basis, may indicate that the business is struggling. Providing details about the delay may put investors at ease or give them reason to plan an exit strategy.
Need Professional SEC Filing Help?
Submitting reports to the SEC is a crucial part of running a publicly owned company, and sometimes this task is difficult to accomplish. Businesses that are facing a unique problem that renders them unable to file a report on time should consider filing SEC Form 12b-25 to give them a short extension that allows them to finish and submit the report. Improper or late filing can lead to penalties, which highlights the importance of timely submission. DFIN offers an effective solution that helps companies identify their responsibilities and meet SEC compliance standards. Contact us to find out more about our SEC filing software, or discover the benefits of our SEC filing calendar.
