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Initial Public Offering Legal Requirements—Undergoing IPO is not as Easy as you Think
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Growth of their business is one thing that most investors want to happen during their tenure in the business industry. They want to see the operation of their business to grow and probably expand it to accommodate the needs of other potential clientele not just within the regional coverage but on the national or probably on the international coverage as well. Such growth in business operation alone already translates to huge revenues later on.
However, along with the sweet fruits of the growth of your operation, expect that you will incur additional expenditures resulting from such operation growth. You need to finance additional personnel who will handle the expanded operation as well as additional raw materials from your suppliers. In other words, once the growth is seen within the business operation, there is a need for you to sustain such growth by assuring that all additional expenditures will be met along the way.
Thus, you need additional funding to sustain your growing company. Additional capital must be raised to finance the expansion of business operation.
What will you do? Ask your financial advisers or even market experts, and they will just spell three significant words to you.
INITIAL PUBLIC OFFERING.
Also known as IPO, initial public offering is referred to as the first sale or issuance of a company’s common shares to the interested investors. Its main purpose is to raise additional capital or finances for the company through the distribution of their common shares to investors who want to purchase it. Take note that the term only applies to the first sale or issuance of a company’s common shares to the public. Any later issuance of shares will now be referred to as a secondary market offering.
IPO is considered to be an effective method of raising capital for a company. However, take note that the laws of a particular country where the IPO process will take place impose heavy legal requirements and compliances that every company going on public must met. In other words, undergoing an IPO process is not as easy as you think. You must be knowledgeable about the rules and regulations that you must comply with regarding IPO.
In the United States, the initial public offering is governed by the Federal Securities Act of 1993, together with the rules and regulation of the U.S. Securities and Exchange Commission. In addition, each exchange has their respective and separate rules that any company that will go on public must comply. For small companies that will undergo the IPO process, it may be affected by a certain state’s blue sky laws, though such laws may pre-empted by federal laws especially when the common shares are listed on major exchanges.
Before the IPO process jumps off, the issuer (the company that will sell its common shares to the public) must outline a prospectus. It will contain the overview of the company’s history, corporate background, products, operations, risk factors, and other essential information. The Securities and Exchange Commission will actively review the content of the prospectus and major law firms are involved in the drafting process.
Once the SEC approved the prospectus, the market value of the common shares will now be finalized and the IPO are now in the “free riding” stage wherein the shares will now be offered for sale on different methods, such as road shows, telephone calls, and institutional visits. All the offers must be accompanied by a copy of the prospectus.
The legal requirements are really heavy if your company will go on IPO. However, once such legal requirements have been complied with, expect that additional capital that you will use to sustain the growth of your business’ operation is within your reach.
Companies That Have Had An Initial Public Offering In The Specific links
Companies That Have Had An Initial Public Offering In The News
The Future is Looking Bright for Facebook and Their IPO - Z6Mag
 New York Daily News | The Future is Looking Bright for Facebook and Their IPO Z6Mag IPOs are usually offered by smaller companies that need more money so they can expand, but as you can see, large and successful companies can do it as well. The reasons for a larger business to have an IPO are numerous; they could be looking to expand ... Facebook Stalls in Public Debut After Record $16 Billion IPO Facebook Dashes Faith FACEBOOK IPO LIVE: The social network goes public |
Intelsat Global files for $1.75 billion IPO - Reuters
 BusinessTech | Intelsat Global files for $1.75 billion IPO Reuters The company filed for its IPO on a day Facebook Inc's eagerly awaited debut fell short of expectations. Technology stocks have had a good run in an otherwise lackluster IPO market, and companies such as Audience Inc and Millennial Media Inc have ... Amid Facebook, Satellite Company Intelsat Launches IPO Intelsat files plans for $1.75b IPO Intelsat files plans for public offering |
With Facebook's announcing plans for IPO, a look at how other IPO stocks have ... - Washington Post
 Christian Science Monitor | With Facebook's announcing plans for IPO, a look at how other IPO stocks have ... Washington Post The companies are all loosely Internet-related, though their businesses vary widely. — Yelp Inc., developer of online games, first day of trading on March 2, 2012 Pricing: $15 per share First-day's close: $24.58, up 64 percent from IPO price Friday's ... Facebook IPO stumbles: Why didn't it wow investors? (+video) Update: Facebook IPO stumbles out of the gate Live Blog: Facebook's Market Debut |
In the public eye - Boston Globe
In the public eye Boston Globe We've managed to raise $130 million. The IPO brought in $63 million. It allows us to execute on our business model into 2016. It's almost unheard-of for a biotech company to have that length of runway. It allows us to do the right science, ... |
Status update: Facebook's Mark Zuckerberg gets married - Reuters
 Telegraph.co.uk | Status update: Facebook's Mark Zuckerberg gets married Reuters The IPO did not go as well as the social networking company had hoped, with shares closing just above the offering price of $38 a share after trading glitches and a last-minute, 25 percent increase in the number of shares being sold. Facebook founder Mark Zuckerberg marries one day after $104bn IPO Mark Zuckerberg marries long-term girlfriend Priscilla Chan in secret ceremony ... Zuckerberg's other initial public offering: he just got married |