Schedule 13D is known as a Beneficial Ownership Report
The term “beneficial owner” is defined under SEC rules, and is basically any person who directly or indirectly shares voting power or the power to sell the security. For example, this would include individuals who are the majority member of an LLC and the Trustee of a Trust.
Schedule 13D Must Be Filed By Shareholders of Greater Than 5%
When a person or group becomes the beneficial owner of greater than Five Percent (5%) of a voting class of an Issuer’s equity securities registered under Section 12 of the Securities Exchange Act of 1934, the beneficial owner is required to file a Schedule 13D with the SEC.
Under certain circumstances the shorter Schedule 13G may be used. Shareholders owning more than 5% in non reporting companies such as voluntary filers and Pink Sheets are not required to file a Schedule 13D or Schedule 13G.
Who Has the Obligation to File a Schedule 13D?
It is important to note that the beneficial owner has the obligation to file a Schedule 13D, not the public company, since the nature of “beneficial ownership” might prevent the Issuer from knowing which individuals are behind all of its corporate entity shareholders, such as LLCs or Trusts.
Schedule 13D filings for most publicly traded companies are searchable in the SEC’s EDGAR database system.
Matt Stout, OTC securities attorney, works with shareholders to issue Rule 144 legal opinions and to assist with SEC filings, such as Schedule 13D and SEC Forms 3, 4, and 5.