The Most Frequently Asked HSR Questions
1. Where are the Act and the rules located?
16CFR § 801-803, 15 U.S.C. § 18a and www.ftc.gov.
2. How much is the filing fee?
$45,000 for transactions less than $100 MM
$125,000 for transactions $100 MM to < $500 MM
$280,000 for transactions $500 MM or more
3. Is it ok to send the electronic wire filing fee in the name of the law firm?
No, you should identify the person (UPE) filing.
4. May the parties file a faxed copy of the affidavit and certification pages?
Yes, but you must follow up with one original to the FTC. (Formal Interpretation 16)
5. When filing as an acquiring and acquired person, can one form be used?
Yes. However, remember to limit your response in Items 5-8 when reporting as the acquired.person. (§ 803.2 (b) and (c))
6. When filing as an individual, what revenue information is required?
As an acquiring person, revenue for all entities controlled by person plus all investment income.
7. What is the most frequent deficiency in a filing?
Item 5 deficiency (e.g. using incorrect NAICS numbers) and failure to limit Items 5-8 as an acquired person to the assets or issuer being sold. (§ 803.2 (b) and (c))
8. What is a secondary acquisition?
Section 801.4 of the Rules - Whenever as a result of an acquisition (the "primary acquisition") an acquiring person will obtain control of an issuer which holds voting securities of another issuer which it does not control, the acquisition of the other issuers voting securities is a secondary acquisition.
9. When is an entity a domestic or foreign person?
A person is foreign if it is not incorporated or organized under the laws of the U.S. or has principal offices within the U.S. (§ 801.1(e))
10. Under Item 5 of the Notification Form, should the last full year data include sales for businesses acquired during the past full year or only sales of the acquired businesses during the period that the businesses were owned by the filing entity?
The last full year for the businesses acquired during the year.
11. If the acquired person is a nonprofit corporation, which does not have voting securities, should the proposed transaction be considered an asset acquisition?
Yes.
12. When a filing is withdrawn and refiled within two business days, is a new certification required from the acquiring person?
Yes. You must also update items 4(a), 4(b) and 4(c), if necessary.
13. What constitutes a reformation of an LLC?
When an existing LLC acquires a business (v/s or assets) and there is a change in the percentage of membership interests. (Formal Interpretation 15)
14. If after the acquisition, the acquiring person holds less than 10% of the voting securities of the issuer and a management position with the issuer, is this exempt under § 802.9?
No, not if the management position is an director of the company.
15. How is an exclusive license valued?
The Board of Directors of the acquiring person or its designee must make that determination based on fair market value.