[Last updated: 1 January 2025, unless otherwise noted]

In US parlance and M&A practice, "going private" refers to a takeover transaction that usually includes a squeeze-out of public company shareholders effected by an affiliate (or by an affiliate acting with an outside party), which could be a controlling shareholder or shareholder group or the target public company's management. The object of a going private transaction is to cause the target public company to become privately held. However, a public company may terminate its SEC periodic reporting requirements without going completely private. This is sometimes referred to as "going dark" because the public company is no longer obligated to furnish information to the SEC. This requires that the company both delist from the stock exchange where is it listed and de-register under the Exchange Act.

8.1 Delisting

A stock exchange will generally delist the shares of a public company upon notice to the exchange by the public company. The exchange can also delist a public company for violations of the exchange's continuing listing requirements, such as a share price below the minimum price mandated by those requirements or failure to comply with SEC reporting requirements. Following delisting, however, the company may continue to be subject to SEC reporting requirements because, for example, the delisted shares will continue to be registered under, or the company will have an obligation to register them under, the Exchange Act as long as the delisted company has at least 300 shareholders of record (1,200 if the company is a bank, a bank holding company or a savings and loan holding company). Additional steps beyond delisting must be taken to terminate the company's SEC reporting obligations.

8.2 Deregistration and termination of reporting

To terminate Exchange Act registration and SEC reporting obligations, a company must file a Form 15 with the SEC certifying that the class of securities registered under the Exchange Act is held of record by:

• less than 300 persons (1,200 if the company is a bank, a bank holding company or a savings and loan holding company); or
• less than 500 persons if its total assets have not exceeded US$ 10 million on the last day of each of its last three fiscal years.

Deregistration is effective 90 days following filing of the certification, but reporting obligations are suspended immediately. Reporting obligations are reinstated if the certification is withdrawn or denied.

8.3 Take-private transactions

You may also refer to Baker McKenzie's Global Guide to Take-Private Transactions, which covers some of the noteworthy features and requirements applicable to take-private transactions.