Going public can be a great way for businesses to raise capital and expand their operations. A private company goes public when it becomes a publicly traded entity by offering shares of its stock to the general public. However, businesses looking to go public are required to comply with strict state, federal, and international (where applicable) laws, which can often be complex and time-consuming.

Frederick M. Lehrer has over thirty years of experience helping clients with corporate and securities law, including going public securities law. He is dedicated to helping companies seamlessly transition to public ownership while minimizing risks and avoiding costly errors. Located in the Orlando, Florida area, the firm serves clients in the state and worldwide. Reach out today to schedule a free consultation.

Understanding the Going Public Process

"Going public" refers to the process by which a privately held company offers its shares to the public for the first time, typically through an initial public offering (IPO). This step enables companies to raise substantial capital for expansion, product development, or other strategic initiatives while providing liquidity to early investors.

However, going public also subjects companies to additional regulatory scrutiny, ongoing reporting requirements, and corporate governance obligations. Businesses in Florida must adhere not only to the federal laws enforced by the U.S. Securities and Exchange Commission (SEC) but also to Florida state-specific securities regulations and other states pursuant to their respective  "blue sky laws." International businesses must also comply with the securities laws of their home country as well as any other countries in which they offer securities.

Key Steps for Going Public

Going public and selling securities to the public is a major decision for any company. Doing so often involves significant legal, financial, and operational considerations, so it is important to determine your readiness by evaluating your business's financial health, market position, and growth potential. Some key steps that you and your company should typically take when going public include:

1. Properly Structure Your Company

Before your company can go public, you must first make sure its corporate structure is aligned with shareholder expectations and regulatory requirements. This may include converting the business entity into a C-Corporation, as this is typically required for publicly traded companies. You will also need to review any existing corporate governance structures to make sure they comply with SEC rules and prepare or amend organizational documents such as Articles of Incorporation and Bylaws.

2. Select an Underwriter & Prepare documentation:

An underwriter is a financial institution or investment bank that helps facilitate the sale of stocks or bonds to the public. Companies may hire an underwriter to manage the initial public offering (IPO) process. During this process, you will need to draft several documents, including a registration statement, prospectus, and roadshow presentation..

3. Set a Price Range & Market the Offering

The underwriter will work with your company to determine a suitable price range for the IPO shares. This involves analyzing factors such as market conditions, industry trends, and financial projections. Once the price range is set, the underwriter will begin marketing the IPO to potential investors through various channels, such as roadshows, media coverage, and investor meetings. This will help generate interest and demand for your company's stock.

4. Conduct Due Diligence

As part of the IPO process, the underwriter will also conduct due diligence to make sure that all necessary information about your company has been disclosed and that there are no legal or financial issues that could impact the IPO.

5. File a Registration Statement

You will need to file a Form S-1 Registration Statement for your business with the Securities and Exchange Commission (SEC). This document should include a detailed business description and market analysis, any audited financial statements according to the Generally Accepted Accounting Principles (GAAP), and any potential risks for investors.

After submitting the registration statement, you must wait for the SEC to review and approve it before moving forward with the IPO. This can often take several months as the SEC carefully reviews all aspects of the offering.

6. Price Your Company Share & Market the IPO

Once approved by the SEC, the underwriters will work with your company to determine the initial offering price of the shares. This is a crucial step as it determines how much money your company will raise from the IPO. You will then need to work with the underwriters to market the upcoming IPO to potential investors. This may include road shows, where executives from your company can pitch to large institutional investors, and media promotions.

7. Settle on a Date & Go Public

Once all preparations are complete, including obtaining SEC approval and finalizing pricing, you can set a date for the IPO. This is typically announced publicly and allows investors to plan for purchasing shares in your company. On the designated date, your company will officially go public and begin trading on the stock exchange.

8. Maintain Compliance After Going Public

Going public is only the beginning of a company’s new regulatory responsibilities. Publicly traded companies must comply with periodic reporting requirements under the Securities Exchange Act of 1934. This includes filing quarterly reports (Form 10-Q), annual reports (Form 10-K), and current event reports (Form 8-K).

The Benefits of Going Public

Going public with your business often has many benefits. However, it is important to make sure your business is structured accordingly and complies with the regulations of the SEC and any regulating bodies in the countries where your business operates. Some of the primary benefits of going public include the following:

• Access to capital: By offering shares of stock to the public, you can raise large sums of money that can be used for expansion, research and development, or other projects.

• Increased credibility: Being a publicly traded company can increase a business's credibility and visibility in the market, making it more attractive to potential customers and investors.

• Liquidity for shareholders: Going public allows existing shareholders to sell their shares on the open market, providing them with liquidity and potentially increasing their wealth.

• Enhanced brand recognition: Being listed on a stock exchange can provide businesses with enhanced brand recognition, as well as exposure to a wider audience of potential customers.

How Frederick M Lehrer Can Help

Choosing the right legal counsel is essential for a smooth and successful transition to public ownership. Frederick M. Lehrer offers unlimited services for a flat monthly fee. Some of the ways Attorney Lehrer can help your business include:

• 25+ years of experience: With years of experience in corporate and securities law, Mr. Lehrer has extensive knowledge of Florida state, federal, and international securities regulations.

• Personalized service: Every company’s goals and challenges are unique, and the firm tailors its legal strategies to meet the specific needs of its clients.

• Proactive problem-solving: Mr. Lehrer can identify potential barriers to SEC compliance early to help mitigate potential risks and prevent costly delays.

• Comprehensive services: Attorney Lehrer offers comprehensive going public services, including drafting and amending S-1 and Form 10 Registration Statements, replying to correspondence to SEC comments, discussing/clarifying comments with SEC examiners, creating state corporate action documents, and ensuring compliance with Blue Sky laws.

International Going Public Law Services

Deciding to take a company public is a significant milestone. A successful transition requires careful planning, precise execution, and the support of an experienced attorney who understands the intricacies of state, federal, and international law.

Frederick M. Lehrer is experienced in handling securities and going public matters and offers unlimited legal services to his clients for a flat monthly fee. Based in the Orlando, Florida area, the firm serves clients throughout the state and worldwide. Reach out today to schedule a free consultation.