skip to Main Content

Purpose Of Registration Rights Agreement

Rights are usually traded when private shares are purchased. Typical trading points are the number of rights allocated to the investor, with management probably favoring fewer rights due to IPO expenses. The company may prevent the granting of registration rights for several years, especially if the company is at an early stage of fundraising. This prevents the company from going public until it has worked long enough to be stable. It is in the interest of the company to limit the effect of the registration right. Loonie rights also allow investors to have priority over shareholders of non-corporate shares. This means that they can participate in the registration process, while others are excluded. Other trading points may be the minimum size of a dollar application record and whether the company needs to make “better” or “economically reasonable” efforts to make a registration (investors often look for the former). There are two main types of registration fees: the application and the loonie. Investors rarely use registration fees in accordance with the conditions…

Back To Top