Going Public Guide Brenda Hamilton
Submitted 2014-02-17 03:57:07 While going public offers many benefits it also comes with risks and quantities of regulations with which issuers must become familiar. Despite the risks even in a down economy Austin Hooper Falcons Jersey , the U.S. markets remain an attractive source of capital for both domestic and foreign issuers.

Going public is a complicated & intricate procedure, and it is important to have an experienced securities attorney to help your company navigate through the process and deal with the Securities & Exchange Commission the ("SEC"), Financial Regulatory Authority ("FINRA") & Depository Trust Company ("DTC"). Upon completion of a going public transaction, most companies are subject to the regulations that apply to public companies, including those of the Securities Act of 1933, as amended (the "Securities Act") and Securities Exchange Act of 1934, as amended (the "Exchange Act").

There are two primary sets of federal securities laws that come into play when a company wants to offer and sell its securities and go public. These are the Securities Act of 1933 ("Securities Act") Deion Jones Falcons Jersey , and the Securities Exchange Act of 1934 ("Exchange Act").

The Securities Act in Going Public Transactions

The Securities Act regulates offers and sales of securities in the United States or that use the means of interstate commerce, such as the internet, U.S. telephone lines or the U.S mail.

For securities offerings to the public, the Securities Act generally requires the company to file a registration statement containing information about itself, the securities it is offering and the offering. The SEC staff reviews these registration statements to see if the SEC’s disclosure rules are satisfied. The SEC does not evaluate the merits of securities offerings, or determine whether the securities offered are "good" investments or appropriate for a particular type of investor. Once the review is completed, the staff declares the registration statement "effective Paul Worrilow Falcons Jersey ," allowing it to be used to complete sales to investors.

The Exchange Act in Going Public Transactions

The Exchange Act requires companies that meet certain thresholds to report information regularly about their business operations, financial condition, and management. These companies must file periodic reports or other information with the SEC. In some cases, the company must deliver the information directly to investors.

Going Public and Raising Capital

A small business can raise capital in a number of different ways during their going public transaction, including borrowing money from banks, other financial institutions or friendsfamily and by selling securities. If a small business is offering and selling securities, even if to just one person Tyson Jackson Falcons Jersey , the offer and sale of the securities must either be registered with the SEC or conducted in accordance with one of the many registration exemptions under the Securities Act. Filing a Registration Statement with the SEC will make a company a public company. Going public is a very significant step for any company.

Going Public Advantages:

Companies go public for a number of reasons, and these reasons can be different for each company. Some of the reasons include:

? To raise capital and potentially broaden opportunities for future access to capital.

? To increase liquidity for a company’s stock, which may allow owners and employees to more easily sell stock.

? To acquire other businesses with the public company’s stock.

? To attract and compensate employees with public company stock and stock-option compensation.

? To create publicity, brand awareness, and prestige for a company.

Going Public Considerations:

? The company’s going public transaction will take time and money to accomplish.

? Upon completion of a going public transaction, the company will take on significant new obligations, such as filing SEC reports and keeping shareholders and the market informed about the company’s business operations Ricardo Allen Falcons Jersey , financial condition, and management, which will take a significant amount of time for the company’s management and result in additional costs.

? The company and its management may be liable if these new legal obligations are not satisfied.

? The company may lose some flexibility in managing its affairs, particularly when public shareholders must approve the company’s actions.

? Information about the company, such as financial statements and disclosures about material contracts, customers and suppliers, will become available to the general public (including to competitors).

Filing a Registration Statement to Raise Capital in a Going Public Transaction

If a company decides to file a registration statement to raise capital as part of its going public transaction Kemal Ishmael Falcons Jersey , the Securities Act requires the company to file the registration statement with the SEC before it may offer its securities for sale. This process is often referred to as an initial public offering, or "IPO." The company may not actually sell the securities covered by the registration statement until the SEC staff declares the registration statement "effective."

Registration Statements have two principal parts. Part I is the prospectus, the legal offering or "selling" document. The company—the "issuer" of the securities—must describe in the prospectus important facts about its business operations, financial condition, results of operations, risk factors, and manag .