How to Take a Company Public

Video Transcript

"How to take a company public. When taking a company public, one should first consult with a law firm that specializes in securities, and initial public offerings or IPO. To go public, you must first follow the securities exchange commission or the SCC. You can not offer securities before registering with the SCC. Registration statements have two principle parts. Part one is the prospectus or selling document. And, part two contains additional information in that the company does not have to deliver publicly to it's investors. For purposes of going public, a small business is defined as having less than twenty five million in revenues, within their last fiscal year. An outstanding publicly traded stock of no more than twenty five million dollars, depending on the amount of capital companies want to raise, will determine which form is the best to use. Depending on the amount of capital, your company needs to raise will determine which form is needed. SB1 is used to raise ten million dollars or less. And SB2 is utilized to raise capital of any amount. After filing the form with the SCC staff, you're going to analyze the registration to determine whether or not, you're in compliance with disclosure requirements. During this time, known as the first quiet phase, company insiders, as well as analysts, and also any other party that's legally bound to your company, will be restricted from discussing or promoting any thing that has to do with the upcoming IPO. Once the company has satisfied SCC disclosure requirements, and the registration statement becomes effective, then the company can begin selling it's securities. Now, remember, offering publicly traded stock, should be carefully considered, with the proper management and legal team as your company must comply with federal and state laws. Any failure to comply with these federal and state securities' laws, may result in court proceedings, as well as an injunction, and possible conviction. And, it may also include re-payment of illegal gains in addition to civil penalties."