How to Take a Business Public

A business may be taken public for several reasons, but the most common reason is to raise much needed capital. Companies need money to grow and expand. Selling a stake in the company to shareholders is an easy way to do it without losing control of the company. You can remain in control and sell the corporation's stock publicly if all the right documents and protections are in order.

Instructions

Difficulty: Moderate

1. Incorporate. In order to take a business public it must be a corporation. Contact a business planning attorney to determine whether a corporation is best for your situation and to have her draw up the legal documents. Let a professional in the field do it for you. They know the laws most favorable to your business and the caveats to business planning. Certain states have more favorable laws and regulations for certain businesses.
2. Get some good publicity about your company. Before you go public get the publicity that highlights the company's best features. Get your name out there and create a buzz. When the company goes public you want people to already know who you are.
3. Have an auditor go through your financial records. Make sure you are ready for the public scrutiny that will take place once you are public. Many policies and financial transactions will be questioned, so make sure they are in order and discrepancies are cleared up.
4. Contact a corporate and securities law attorney. There are rules and formalities that must be followed. You are entering the big league where mistakes mean huge financial penalties.
5. Work with the securities lawyer to file a registration statement with the Securities and Exchange Commission (SEC). The SEC staff will then declare it "effective." Once you have your paperwork in line with the SEC, you are ready to roll. But, the forms are not a matter of filling in the blanks like tax returns. They must be tailored, so let a securities attorney do it for you.