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Initial Public Offering Process Article
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Initial Public Offering Legal Requirements—Undergoing IPO is not as Easy as you Think
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Growth of their business is one thing that most investors want to happen during their tenure in the business industry. They want to see the operation of their business to grow and probably expand it to accommodate the needs of other potential clientele not just within the regional coverage but on the national or probably on the international coverage as well. Such growth in business operation alone already translates to huge revenues later on.
However, along with the sweet fruits of the growth of your operation, expect that you will incur additional expenditures resulting from such operation growth. You need to finance additional personnel who will handle the expanded operation as well as additional raw materials from your suppliers. In other words, once the growth is seen within the business operation, there is a need for you to sustain such growth by assuring that all additional expenditures will be met along the way.
Thus, you need additional funding to sustain your growing company. Additional capital must be raised to finance the expansion of business operation.
What will you do? Ask your financial advisers or even market experts, and they will just spell three significant words to you.
INITIAL PUBLIC OFFERING.
Also known as IPO, initial public offering is referred to as the first sale or issuance of a company’s common shares to the interested investors. Its main purpose is to raise additional capital or finances for the company through the distribution of their common shares to investors who want to purchase it. Take note that the term only applies to the first sale or issuance of a company’s common shares to the public. Any later issuance of shares will now be referred to as a secondary market offering.
IPO is considered to be an effective method of raising capital for a company. However, take note that the laws of a particular country where the IPO process will take place impose heavy legal requirements and compliances that every company going on public must met. In other words, undergoing an IPO process is not as easy as you think. You must be knowledgeable about the rules and regulations that you must comply with regarding IPO.
In the United States, the initial public offering is governed by the Federal Securities Act of 1993, together with the rules and regulation of the U.S. Securities and Exchange Commission. In addition, each exchange has their respective and separate rules that any company that will go on public must comply. For small companies that will undergo the IPO process, it may be affected by a certain state’s blue sky laws, though such laws may pre-empted by federal laws especially when the common shares are listed on major exchanges.
Before the IPO process jumps off, the issuer (the company that will sell its common shares to the public) must outline a prospectus. It will contain the overview of the company’s history, corporate background, products, operations, risk factors, and other essential information. The Securities and Exchange Commission will actively review the content of the prospectus and major law firms are involved in the drafting process.
Once the SEC approved the prospectus, the market value of the common shares will now be finalized and the IPO are now in the “free riding” stage wherein the shares will now be offered for sale on different methods, such as road shows, telephone calls, and institutional visits. All the offers must be accompanied by a copy of the prospectus.
The legal requirements are really heavy if your company will go on IPO. However, once such legal requirements have been complied with, expect that additional capital that you will use to sustain the growth of your business’ operation is within your reach.
Initial Public Offering Process News
Vodafone Says No Tax Due in India, Mulls IPO for Local Unit - Wall Street Journal
 IntoMobile (blog) | Vodafone Says No Tax Due in India, Mulls IPO for Local Unit Wall Street Journal The company needs funds to further expand in India's fast-growing telecom market and an initial public offering could be a way, analysts say. ... Vodafone-Essar may bring IPO Essar Group may look at an IPO of Vodafone stake next year Essar Group CEO: In Preliminary Talks For Vodafone Essar IPO |
SKS sale draws negative interest - Asia Times Online
 Kansas City Star | SKS sale draws negative interest Asia Times Online It left him with only 6% of the capital - too small a percentage to be even considered a small promoter of the IPO. Akula's decision to cut his stake in the ... SKS Microfinance IPO to hit markets on July 28, 2010 SKS Microfinance: giant squid, 'devta' or just a business? SKS Microfinance IPO opens for subscription |
DST to Introduce IPO in 2001 - The Moscow Times
DST to Introduce IPO in 2001 The Moscow Times DST hired Goldman Sachs, Morgan Stanley and JPMorgan to conduct the IPO, which is most likely to take place next spring, Vedomosti reported Thursday, ... |
INTERVIEW: Direct Edge Plans IPO Next Year, Expansion Into Market Data And ... - Wall Street Journal
INTERVIEW: Direct Edge Plans IPO Next Year, Expansion Into Market Data And ... Wall Street Journal An initial public offering, previously seen this year, could come in 2011, though O'Brien warned that timing was dependent upon market conditions. ... Direct Edge explores enhancements after exchange launch Direct Edge Launches Exchange Operations |
MEG reduces price of IPO - Calgary Herald
MEG reduces price of IPO Calgary Herald An unnamed source with knowledge of the process told the Herald the target price for what was to be a $1-billion-plus IPO for MEG had been cut to a range of ... |