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Filing Form 8-k? Know its Triggering Events

Filing Form 8 k Know its Triggering Events

Any company that underwent any corporate or material change must document the same on the Form 8k. This report helps the investor identify public events, including acquisitions, bankruptcy, changes in the company’s fiscal year, or the resignation of directors or officers. In order to keep the company’s shareholders as well as the markets cognizant of all material advances in real-time, the company is accountable in construing the 8-K filings. It has been pragmatic in many cases that the filing of an 8-K leads to a change in the company’s share price, which can cause a positive or negative impact depending on how the market perceives the event. Therefore, given the significance of the event, the company is advisable to publicly disclose all relevant details.

When to file form 8k?
Companies are required to file a Form 8-K within four business days from an event that triggers its filing requirement. In case the issuer is furnishing a Form 8-K under Regulation FD, then the due date might be earlier.

What changes to report on 8k?
The SEC requires disclosure for various changes relating to a registrant’s business and operations. The SEC has outlined the various situations that require Form 8-K, and listed below are the events that triggers company’s obligation to file the Form-8k.

  • Registrant’s Business and Operations –
    • Entry into a Material Definitive Agreement
    • Termination of a Material Definitive Agreement
    • Bankruptcy or Receivership
    • Mine Safety – Reporting of Shutdowns and Patterns of Violations

The registrant must disclose if they have entered into or terminated any material definitive agreement. In either case of Receivership and Bankruptcy, the registrant must disclose if any fiscal agent or similar officer has been appointed for a registrant. If the registrant plans to reorganize/restructure the business, the same needs to be disclosed as well.

  • Financial Information
    • Completion of Acquisition or Disposition of Assets
    • Results of Operations and Financial Condition
    • Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
    • Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
    • Costs Associated with Exit or Disposal Activities
    • Material Impairments

According to the SEC mandate, the registrant is accountable for providing complete financial information disclosure requirements, including the events such as acquisition, any change in the company’s financial condition, disposal activities, and the case of substantial impairment. The registrant also becomes directly or contingently liable for a significant obligation arising from an off-balance sheet arrangement.

  • Securities and Trading Markets
    • Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
    • Unregistered Sales of Equity Securities
    • Material Modification to Rights of Security Holders

The registrant must notify that it is aware of material noncompliance with a rule or standard for continued listing so that a public reprimand letter or similar communication indicating that registrant violated a rule or standard for continued listing can be issued. In addition, the SEC mandates filing an 8-K for the delisting of stock, unregistered sales of securities, and any material modifications to shareholder rights.

  • Matters Related to Accountants and Financial Statements
    • Changes in Registrant’s Certifying Accountant
    • Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

In case the registrant changes the accountant on whom the previous reporting reliance fell and then appoint a new one, the company must disclose such event. Further, if the company should also declare if their previously filed annual or interim financial statements could not be relied upon because of any error.

  • Corporate Governance and Management
    • Changes in Control of Registrant
    • Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
    • Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
    • Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans
    • Amendment to Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics
    • Change in Shell Company Status
    • Submission of Matters to a Vote of Security Holders
    • Shareholder Director Nominations

An 8-K is required whenever a business changes in corporate governance, such as control of the registrant or makes any amendments to articles of incorporation. If a company changes its fiscal year and modifies the registrant’s code of ethics, then such changes must also be disclosed. This report has to be filed upon the election, appointment, or departure of a director or specific officers. Additionally, if the Registrant completes a transaction that may cause it to terminate its status as a shell company, the report goes out in 8-k.

  • Asset-Backed Securities
    • ABS Informational and Computational Material
    • Change of Servicer or Trustee
    • Change in Credit Enhancement or Other External Support
    • Failure to Make a Required Distribution
    • Securities Act Updating Disclosure

Any ABS informational and computational material must be filed in section 6 of Form-8. The registrant is obligated to report if any services or a trustee has been substituted by a new one, then relevant disclosures including the date along with the circumstances surrounding the change has to be reported. The record must be made if the depositor becomes aware that any material enhancement that was previously applicable to one or more than one classes of the asset-backed securities has voluntarily terminated.

  • Regulation FD
    • Regulation FD Disclosure

Item 7.01 of Form-8 is utilized for all the disclosures to pursuant to Regulation FD.

  • Other Events
    • Other Events

This section of Form 8-K must be issued based on any other events the registrant considers to be of prime importance to shareholders.

  • Financial Statements and Exhibits
    • Financial Statements and Exhibits

All the disclosures made in the Section 9 concerning about any business acquisition or fund acquisition for which the financial statements and any applicable supplemental information is to be presented of the acquired business. Additionally, the pertinent exhibits shall be considered to be furnished, depending on the relevance requiring such exhibit, in accordance with the provisions of Form-8k.

MAS is registered with PCAOB, USA, and has assisted its clients with providing audit and assurance services for over a decade to various clients in the United States, including broker-dealers. We serve different broker-dealer firms registered in the United States w.r.t. their audits under Rule 17a-5 under the Securities Exchange Act of 1934 (FINRA Audit). In case you have any questions or wish to know more about SEC Form 8-K, kindly contact us.


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