Initial Public Offering Process


This practice note discusses initial public offerings (IPOs), including the legal requirements under securities laws, preparing the client for the IPO process, the parties in an IPO and their roles, the due diligence process, the underwriting process, the sales and distribution process, and the closing process. It also reviews ongoing reporting obligations and liability as well as other considerations. In an IPO, a company offers and sells its securities, usually common stock, to the public for the first time in an offering registered with the Securities and Exchange Commission (the SEC) and usually lists the securities on a national stock exchange such as the New York Stock Exchange (NYSE), or one of the Nasdaq stock markets (Nasdaq). Companies considering an IPO need to understand the legal requirements and implications of becoming public so that they can weigh the benefits and costs of being a public company before committing the time and resources required to conduct an IPO.