Disclosure duties

Disclosure duties in the context of the U.S. business environment ordinarily refer to information that companies and corporate officers must disclose on a timely basis to the public. Many disclosure duties originate in U.S. securities law and cover, for example, the PROSPECTUS that any stock, bond, or security buyer must receive. These disclosure duties relate to publicly traded companies, not privately held businesses. Other disclosure duties concern corporate accounts, ANNUAL REPORTs, materially significant events, and the securities transactions of company “insiders.” Some disclosure duties are specific to certain industries. For example, franchisers are obligated under federal and some state laws to disclose to prospective franchisees the nature of their franchise system and CONTRACT obligations. Other disclosure duties are consumer-oriented, such as the energy efficiency of household appliances and the fuel efficiency of automobiles. The economic premise behind disclosure duties is that information helps perfect markets by leveling the knowledge of buyers and sellers.