What is the role of the Securities and Exchange Commission (SEC) in the incorporation process?

The Securities and Exchange Commission (SEC) plays a crucial role in overseeing the compliance of companies with federal securities laws, particularly in the context of public offerings and the trading of securities. In the incorporation process, the SEC is primarily responsible for ensuring that companies adhere to the filing requirements established under the Securities Act of 1933 and other relevant securities regulations. This involves reviewing and processing registration statements and prospectuses that companies must file when they intend to offer their securities to the public.

Ensuring compliance with incorporation filings helps to protect investors by promoting transparency and requiring adequate disclosure of material information about the issuing company. This includes details about the company's financials, risks, and business operations, which are necessary for informed investment decisions. The SEC does not approve financial statements, issue business licenses, or regulate stock prices directly, as those functions may fall under other regulatory bodies or the market context itself. Therefore, the correct answer emphasizes the SEC's role in monitoring adherence to the legal requirements during the incorporation and securities issuance process.