The Form S-8

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The Form S-8 allows a company to register securities that it offers to its employees and consultants under an employee benefit plan. Such a plan can involve a broad array of securities-related issuances, such as common stock, stock options, restricted stock units, purchases under an employee stock purchase plan, and so on. People covered by this type of registration include employees, officers, directors, general partners, and consultants. Securities issued to consultants can only be registered through a Form S-8 if they provide bona fide services to the company, and those services are not related to the sale of its securities, or making a market in them. Family members are also covered, if they received company securities through an employee gift.

There are two significant advantages to using a Form S-8. First, the Form is effective immediately upon filing, rather than the usual interminable process of waiting for and responding to SEC comment letters. Second, it is extremely simple to complete. The company must merely state that its regular periodic filings are incorporated by reference, and note the manner in which the company indemnifies its officers and directors. There are a few other requirements that are generally not applicable. The principle accompanying document is the employee benefit plan.

This form of registration is only available if a public company has been current with its filing requirements for at least the past 12 months, and has not been a shell company for at least the preceding 60 days.

In short, the Form S-8 presents significant advantages over the normal securities registration process. However, since it is applicable only to employee benefit plans, it usually applies to only a small proportion of a company’s outstanding securities.

Podcast

A discussion about stock registrations is available on Episode 93 of the Accounting Best Practices podcast. Listen Now.