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Business Startups Seeking an Initial Public Offering

Business Startup Attorney

 

Business Startups Seeking an Initial Public Offering

 

What is an Initial Public Offering “IPO”?

Most of us are familiar with the term IPO but few of us really understand what it means. An IPO is when a private company, for the first time in its history, offers shares of itself to investors and issues stock in exchange, at which time the company transforms into a public company. Thus, the term Initial Public Offering. Off course there are lots more technicalities but the jest is to raise capital.

Most business startups seek to IPO at some time; however, in order to be ripe for an IPO there are many hurdles that the company must overcome. In essence, the company must substantiate that it is live, well, and profitable. At this time most companies IPO by approaching an investment bank to underwrite the process. An underwriter basically values the shares of the company and creates the medium to offer the shares to the public.

Does a Business Have to Comply With Specific Regulations?

There are different types of investment funds and vary based on the level of regulation, objectives, and type of authorized investments. The Investment Company Act (ICA) regulates investment companies. ICA defines an investment company as issuer of securities that is engaged, holds itself out as being engaged, or proposes to engage primarily in the business of investing, reinvesting or trading securities. Generally, investment companies under ICA are heavily regulated and must register with the Securities and Exchange Commission (SEC). Startups that are looking for investors or are seeking to provide an initial public offering may be subject to SEC regulations. It’s imperative that business understand and comply with SEC, as well as other regulations.

If you are in the process of  or are interested in providing an initial public offering, request a consultation with a Los Angeles Business Startup Attorney. Our attorneys will consult and inform you about the various regulations and steps you must take in order to fulfil your business’ objective.

If you would like to learn more, here is an article on IPO that Hilton Hotels initiated.

This content is intended for educational purposes only. KAASS LAW is authorized to practice law in California. The above content is intended for California residents only. This content provides only general information which may or may not reflect current legal developments. KAASS LAW expressly disclaims all liability in respect to actions taken or not taken based on any of the contents of this website. The above content DOES NOT create an attorney-client relationship. KAASS LAW does not represent you unless you have expressly retained KAASS LAW in person at the KAASS LAW office. KAASS LAW helps clients in: Los Angeles, Burbank, Hollywood, Glendale, Van Nuys, North Hollywood, Studio City, Highland Park, Eagle Rock, Sunland, Tujunga, Sylmar, La Crescenta, La Canada, Beverly Hills, Westwood, Santa Monica, Brentwood. Pacoima, Montebello, Commerce, Alhambra, Downey, Bell, Maywood, Walnut Park, Vernon, Lynwood, Echo Park, Silverlake, Mission Hills, Northridge, North Hills, Porter Ranch, Chatsworth, Reseda.

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