DEFINITION of '500 Investor Rule'
A SEC stipulation requiring a company that exceeds 500 individual investors with more than $10 million in assets to file its financials with the Securities & Exchange Commission. According to SEC rules, such a company has 120 days following the end of their fiscal year's end to file.
BREAKING DOWN '500 Investor Rule'
The 500 investor rule is a key threshold for private businesses which do not wish to disclose financial information for public consumption. Many believe that the 500 Investor Rule was one of the reasons that Google (Nasdaq:GOOG) filed for its IPO when it did, as the company was going to have to start disclosing to the SEC anyway.