Growth Company

Growth Company in the United States

There are certain research provisions in Title I of the JOBS Act in relation to growth companies. These provisions include, among others:

Analyst Communications. Section 105(b) of the JOBS Act amends Section 15D of the Securities Exchange Act of 1934 (“Exchange Act” ) to prohibit the Commission or a national securities association registered under Section 15A of the Exchange Act from adopting or maintaining any rule or regulation in connection with an initial public offering (“IPO” ) of the common equity of an emerging growth company that restricts (1)

Testing the Waters. Section 105(c) of the JOBS Act amends Section 5 of the Securities Act of 1933 (“Securities Act” ) to permit an emerging growth company or any person authorized to act on behalf of an emerging growth company to engage in oral or written communications with potential investors that are qualified institutional buyers or institutions that are accredited investors. (2)

Post Offering Communications. Section 105(d) of the JOBS Act prohibits the Commission or any national securities association registered under Section 15A of the Exchange Act from adopting or maintaining any rule or regulation that prohibits any broker, dealer, or member of a national securities association from publishing or distributing any research report or making a public appearance, with respect to the securities of an emerging growth company. (3)

Resources

Notes and References

1. Restricts, based on functional role, which associated persons of a broker, dealer, or member of a national securities association, may arrange for communications between an analyst and a potential investor; or Restricts an analyst from participating in any communications with the management of an emerging growth company that is also attended by any other associated person of a broker, dealer, or member of a national securities association whose functional role is other than as an analyst.
2. As defined in Securities Act Rules 144A and 501(a) (or any successors to such rules) either prior to or following the date of filing of a registration statement with respect to such securities with the Commission, subject to the requirement of Section 5(b)(2) of the Securities Act. Section 5(b)(2) of the Securities Act makes it unlawful for any person to, directly or indirectly, carry or cause to be carried through the mails or in interstate commerce any such security for the purpose of sale or for delivery after sale unless accompanied or preceded by a prospectus that meets the requirements of Section 10(a) of the Securities Act.
3. Either within any prescribed period of time following the IPO date of the emerging growth company; or within any prescribed period of time prior to the expiration date of any agreement between the broker, dealer, or member of a national securities association and the emerging growth company or its shareholders that restricts or prohibits the sale of securities held by the emerging growth company or its shareholders after the IPO date.

See Also

• Sustainable Growth
• Balanced Growth
• Export Management Company
• Headquarters Company
• Trading Company
• Company Law