SEC Reporting

Chapter 2Going Public: An Overview

Learning objectives

• Identify the registration process.
• Identify the roles of the various participants in the registration process.

Notice to readers: Links are included throughout the text to direct participants to relevant websites. If these websites do not appear when typed into a web browser, copy the links into a search engine to be redirected to the proper web page.

Introduction

The decision to take a company public is one of the most difficult decisions facing an owner. It is highly subjective and requires an exhaustive analysis of many intangible factors. A complete understanding of the advantages, disadvantages, and requirements of being a public company can make for a more informed decision.

Once a decision to go public has been made, an elaborate preparation process begins. Professional teams that include underwriters, accountants, attorneys, financial printers, and others must be established. The time lapse between the date of the first “all-hands meeting” to the day the securities can be sold to the public can be from three to six months, sometimes even longer. During this time, fact- finding must be undertaken, due diligence must be performed, documents must be drafted and filed with the SEC staff (and any staff comments addressed), a “roadshow” must be prepared and presented, and any number of other complicated tasks must be accomplished. In some instances, management becomes so involved in the process that the company’s ...