Periodic filings: Overview, definition, and example
What are periodic filings?
Periodic filings refer to the regular submissions or reports that companies, organizations, or individuals are required to submit to regulatory bodies, such as the Securities and Exchange Commission (SEC) or tax authorities. These filings are typically required by law and must be submitted at regular intervals (e.g., quarterly, annually) to provide updates on financial performance, operations, tax obligations, or other material information. The purpose of periodic filings is to ensure transparency, accountability, and compliance with legal and regulatory requirements, allowing stakeholders such as investors, regulators, and the public to stay informed about the entity’s activities.
Why are periodic filings important?
Periodic filings are important because they ensure that a company or organization is complying with legal and regulatory requirements, providing necessary financial and operational information to the relevant authorities and stakeholders. These filings offer transparency into the company’s performance, financial health, and business practices, which is crucial for investors, creditors, and the public to make informed decisions. For regulators, periodic filings help monitor compliance with laws, including tax laws, securities regulations, and corporate governance standards. Failure to file periodic reports can result in penalties, fines, or a loss of business credibility.
Understanding periodic filings through an example
For example, a publicly traded company in the U.S. is required to file quarterly reports (Form 10-Q) and annual reports (Form 10-K) with the SEC. These filings include information about the company's financial performance, risk factors, management discussion, and any material events that have occurred during the reporting period. These filings are essential for investors to evaluate the company’s performance and make informed decisions about buying or selling stock.
In another example, a business entity may be required to file periodic tax returns with the IRS, such as quarterly estimated tax payments or an annual corporate tax return (Form 1120). These filings ensure that the company meets its tax obligations and complies with federal tax laws.
An example of a periodic filings clause
Here’s how a periodic filings clause might appear in a contract or compliance agreement:
“The Company agrees to file all necessary periodic reports required under the Securities Exchange Act of 1934, including quarterly and annual reports, in accordance with applicable securities laws and regulations. The Company will ensure that these filings are accurate and submitted to the appropriate regulatory bodies within the required deadlines.”
Conclusion
Periodic filings are a critical part of ensuring transparency, accountability, and compliance with legal and regulatory standards. They provide stakeholders with important information about a company’s financial status, operations, and adherence to regulatory requirements. By consistently making these filings, companies demonstrate their commitment to maintaining legal and ethical standards, which is vital for building trust with investors, regulators, and the public.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.