How to Go Public
Representation from a Business Lawyer in Houston
Once the decision to go public is made, businesses need to be aware of
how to do so in the way which works best for them. If you have weighed
the pros and cons of going public, you need to understand the process
so you do not waste precious time and money. Speaking with a highly-trained
Houston business attorney can go a long way towards completing the process
of going public in the best way for your company.
Whitley LLP Attorneys at Law has a long track record of coming alongside
businesses at any stage of their evolution to advise them of the best
legal moves to them forward. With more than a decade of experience behind
us and Attorney Samuel E. Whitley was included in the list of
Super Lawyers® Rising Stars for the dedicated legal counsel he has consistently offered to his clients
over the years.
Taking Your Business Public
Two principal ways to go public exist: IPO or reverse merger/takeover:
- With an IPO, the company registers with the SEC to sell its shares to the
public. The company usually hires an investment bank to handle the process
of underwriting the offering (selling the shares).
- If an investment bank is hired, they will be paid a commission on the sale
of the shares. If an investment bank is hired, they can be engaged on
either a “firm commitment” underwriting basis or a “best
- In a firm commitment offering, the investment bank agrees to buy all of
the shares from the company at one price and then resell them to the public
at a higher price.
- In a best efforts offering, the investment bank does not commit to purchase
all of the shares; rather, it agrees to use its best efforts to sell as
many shares as it can and receive a commission on each sale.
In an IPO, the company files a Form S-1 registration statement with the
SEC. This registration statement must include audited financial statements,
information regarding management, the company’s business and assets,
and the intended use of proceeds of the offering.
What is a reverse merger?
In a reverse merger, a private company locates a company that is already public:
- The private company’s shareholders enter into an agreement to sell
their stock to the public company in exchange for stock of the public company.
- The private company (or its shareholders) may also pay cash to the public
company or its majority shareholders.
- After the transaction is consummated, the private company’s shareholders
will control the company and own a large majority of the public company’s
stock, and the private company will be a wholly-owned subsidiary of the
The private company’s management will take over management of the
public company, and many times the public company will change its name
to that of the private company, which is why a reverse merger is sometimes
referred to as a reverse takeover.
Our Houston business attorney is ready to walk you through each stage of
the process of going public, however you choose to do so. Speak with our
firm and we can advise you on the best means of taking your company public.
To schedule your consultation, contact the firm today—(888) 252-8277!