Explanation

Shelf registration is a process under which a company registers its new stock with securities and exchange commission (SEC) but does not issue all of the registered stock immediately to the public. Rather the company prefers to hold some of the stocks to issue at a future date within a period of two years from registration to avoid the problem of overstocking and also take advantage of favourable market conditions in the future.
The shelf registration is done when a company has planned to frequently issue stocks to the public at small intervals.
Companies can use single prospectus for issuing securities related to shelf registration and do not require to issue separate prospectus at every offer of securities with the same registration.

Verified Answer

Shelf registration offers a company to register various offers of securities of the same class within a period of two years just for once with the securities and exchange commission (SEC).