Going Public The Process for Small and Mid-size Companies to Go Public.
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Going Public: The Path for Small and Mid-size Companies
Introduction
Every entrepreneur dreams of seeing their business listed on a stock exchange, continuing to thrive even after they've moved on. Transitioning from private to public is a significant achievement, and this guide will take you through the key steps to make it happen.
Preparing for Public Listing
1. Ensure Company Structure
Most small companies are already incorporated and have a board of directors. This essential foundation sets the stage for going public.
2. Engage a Consultant
Hiring a knowledgeable consultant is crucial. Perform thorough background checks. Search their name online and review their past associations to ensure they haven’t been disciplined by the Securities and Exchange Commission or other bodies. Be wary of those who avoid having websites; it may be to elude regulatory scrutiny.
3. Secure a Securities Attorney
If you don’t have one, ask your consultant for recommendations. An experienced attorney is vital for navigating the public offering process.
4. Conduct an Audit
An audit is essential before any filings with the Securities and Exchange Commission (SEC). Under new corporate governance laws, the CEO must actively participate and affirm the accuracy of the audited financials.
Choosing the Path to Public
5. Decide on the Method
You have options like a reverse merger or a Regulation D (504) offering.
- Reverse Merger: This involves merging with an existing public shell company, offering a cost-effective, quick route compared to a traditional IPO.
- Regulation D (504) Offering: This allows small companies to offer securities without SEC registration. However, a Form D must be filed after the initial sale. Companies can raise up to $1 million in a year, needing sales to at least 35-40 investors.
Finalizing the Process
6. Broker Dealer and Filing
A broker dealer must file a Form 15c211. Your consultant can introduce you to a broker who will handle this step and act as a market maker for your securities.
For further resources, visit [Genesis Corporate Advisors](http://www.genesiscorporateadvisors.com).
By following these steps, small to mid-size companies can effectively navigate the process of going public, making that entrepreneurial dream a reality.
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