An approved registration statement is needed to sell shares. The filing goes to the SEC. When the SEC declares it effective, that means it has met the SEC’s rules. It does not mean that the SEC is passing judgment on the quality of the company.
Could be forced to file a registration statement by an investor.
Form S-1 is the worst; it requires comprehensive documentation of the company.
Shelf registration can be used to file several years in advance of the actual stock issuance. This process is reserved for well known seasoned issuers (quite large public companies).