{"id":4414,"date":"2016-04-04T10:47:30","date_gmt":"2016-04-04T15:47:30","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/business-finances\/chronology-the-process-of-going-public.html"},"modified":"2024-06-06T03:56:23","modified_gmt":"2024-06-06T08:56:23","slug":"chronology-the-process-of-going-public","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/chronology-the-process-of-going-public.html","title":{"rendered":"Chronology: The Process of Going Public"},"content":{"rendered":"\n
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Chronology: The Process of Going Public<\/h1>\n
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The process of taking a company public<\/a> presents unique challenges best faced with the assistance of an experienced team. A crucial member of that team is an experienced securities lawyer<\/a>. Each member of the team has key responsibilities to fulfill in guiding the company through the following process. Read along as FindLaw outlines the general chronology of going public.<\/p>\n

The Process<\/h2>\n
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  1. Board approval<\/b>. The initial public offering<\/a> (IPO) process begins with a proposal to the company’s board of directors by management of the company. Management presents and discusses in detail the company’s past performance, objectives, business plan, and financial projections. Management then proposes that the company enter the public market. After carefully considering the benefits and detriments of going public, the board of directors makes a decision as to whether the IPO should go forward.<\/li>\n
  2. Assembling the team<\/b>. Upon board approval, management of the company should begin the process of assembling the IPO team<\/a>. In particular, a securities lawyer and an accounting firm should be retained as soon as possible.<\/li>\n
  3. Reviewing and restating the financials<\/b>. If the board of directors<\/a> approves the proposal to go public, the company’s financial statements for the preceding five years should be carefully reviewed and, if necessary, restated to comply with Generally Accepted Accounting Principles<\/a> (GAAP). Certain transactions that are ethical and legally permissible for private companies, such as certain sale-leaseback arrangements, must be eliminated and the financial statements appropriately adjusted. The accounting firm normally assists with the review of the financial statements and the making of appropriate adjustments.<\/li>\n
  4. Letter of intent with investment bank<\/b>. The company should at this point select an investment bank and formalize its arrangement with the investment bank pursuant to a "letter of intent" outlining the investment bank’s fees, the size of the offering, the price ranges and other parameters.<\/li>\n
  5. Drafting the prospectus<\/b>. After the letter of intent is signed, the securities lawyers and accountants begin the process of preparing the prospectus<\/a>. A prospectus is a written document prepared for presentation to investors as both a selling document and as a legal disclosure document. The prospectus is required to contain the following information:<\/li>\n<\/ol>\n