What is the minimum number of shareholders for registration with the SEC?

The correct answer involves understanding the thresholds set forth by the Securities and Exchange Commission (SEC) for companies that wish to register their securities and be subject to its reporting requirements. According to the SEC's rules, a company is required to register if it has a total of 2,000 or more shareholders or 500 or more shareholders who are not accredited investors and more than $10 million in assets.

Having 2,000 shareholders is significant as it represents the baseline for publicly-traded companies, ensuring that the SEC can regulate and monitor a larger pool of investors who may be involved in the trading of the company's securities. This requirement helps maintain transparency and protect investors in the public market.

Options suggesting a lower number of shareholders do not capture the SEC's core mandate for widespread shareholder participation, which is crucial for adequate regulation and investor protections in the marketplace.