According to the private-placement document, Facebook, of Palo Alto, Calif., plans to increase its number of shareholders above 500 this year, forcing it to begin disclosing reams of financial information or go public by April 2012, the Wall Street Journal reported.
A person familiar with the company said the social-networking company had fewer than 500 investors as of the end of last year, including current and former employees, venture-capital firms and private investors.
In 2008, Facebook told the Securities and Exchange Commission that the company had fewer than 499 holders in each of five classes of stock.
The number of investors is crucial because of the SEC's 47-year-old rules governing private companies.
The rules require firms with 500 or more shareholders of record in a given type of stock to publicly disclose certain financial information.
The requirement is designed to protect investors from unduly risking their money.
Crossing the threshold triggers the SEC's filing requirements, even if a company's shares don't trade publicly.
Such companies must register as a reporting company within 120 days after the end of year in which the limit is breached. At that point, companies typically conclude that they might as well go public, listing their shares on an exchange and cashing in if the offering succeeds.
Facebook Chief Executive Mark Zuckerberg has said he is in no rush to go public, but those intentions have been hotly contested since the company launched an equity offering of as much as 1.5 billion dollars through Goldman Sachs Group Inc. earlier this week.
Facebook's current fiscal year ends on December 31, making its disclosure deadline the end of April 2012.
People familiar with the matter have said Facebook sought a benchmark valuation from a leading investment bank in preparation for a potential initial public offering next year and was keen on a "round-number" valuation of 50 billion dollars.
The 100-page document that includes the potential timetable for a Facebook public offering is being circulated to would-be investors in the 1.5 billion dollar "special-purpose vehicle" created by Goldman.
The investment vehicle being created by Goldman is intended to pool investors' money to create the legal effect of a single new shareholder in Facebook, since each special-purpose vehicle counts as one shareholder of record.
Companies may exceed that limit during their financial year but still avoid reporting requirements, as long as the total declines to 499 or fewer at the end of the company's fiscal year.
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