What Is SEC Form U-1?

SEC Form U-1 is a uniform statement of purpose form that companies must file to report fundamental changes to a company. The form is used, for example, to report the application or declaration of an issue or sale of securities, an acquisition, bankruptcy, or sale of assets.

Form U-1 was previously known as the Uniform Application to Register Securities, which is now obsolete.

Key Takeaways

  • SEC Form U-1 is used by a company to report fundamental changes to the company or corporate structure.
  • Form U-1 is required under the small corporate offering registration process whereby smaller companies can issue exempt securities.
  • Form U-1 is also an important component for investor protections like Blue Sky laws.

Understanding Form U-1

SEC Form U-1 is used to report material events related to a company that may include one of the following:

  1. fundamental changes
  2. bankruptcy or receivership
  3. modification of shareholder rights
  4. changes to the issuer's certifying accountant
  5. revision of old financial statements
  6. changes to control of issuer
  7. departure of certain corporate officers
  8. unregistered sale of equity securities
  9. other important events at the company's discretion

Form U-1 requires the following information: Name and address of Issuer and principal office in the state; total offering of shares and price; the maximum commission to be charged; list of states in which it is proposed to offer the securities for sale to the public; list the states, if any, which have refused to authorize sale of the securities to the public; provide a copy of the Registration Statement and two copies of the Prospectus; provide the Underwriting Agreement, provide a copy of all advertising matter to be used in connection with the offering; provide a signed copy of opinion of counsel filed with Registration Statement pursuant to the Securities Act of 1933.

Form U-1 and SCOR

Form U-1 is part of the package of documents that must be submitted to the SEC as part of the Small Corporate Offering Registration (SCOR), which was adopted in April 1989. The SCOR Form was designed for use by companies seeking to raise capital through a public offering of securities that were exempt from registration with the SEC, under certain regulations.

In addition to Form U-1, other documents that were required to be filed in a registration application included: two copies of the prospectus, all exhibits filed with the SEC, and the applicable filing fees. The issuer had to file a separate Form U-1 in each state where it desired to sell securities, indicating the number of securities being registered in that state.

Form U1 and Blue Sky Laws

Form U-1 is also a component of the Blue Sky Laws that protect investors. Blue Sky Laws are state regulations established as safeguards for investors against securities fraud. The laws, which may vary by state, typically require sellers of new issues to register their offerings and provide financial details. This allows investors to base their judgments on verifiable information.

The term "blue sky" is said to have originated in the early 1900s when a Supreme Court justice declared his desire to protect investors from speculative ventures that had "as much value as a patch of blue sky." In the years leading up to the 1929 stock market crash, there were instances of companies making lofty, unsubstantiated promises of greater profits to come.