Sophisticated, experienced legal counsel and auditors round out the key members of the IPO team. Legal counsel should have a strong understanding of the securities laws and the IPO process to guide the company through its offering. Legal counsel handles the preparation of the registration statement, and advises the company on compliance with related disclosure requirements. They will also play a key role in making required filings with the SEC, responding to SEC comments on the filings and resolving issues that the SEC may raise. Equally important, legal counsel should have strong expertise in public company law. This expertise will enable legal counsel to help the company make decisions before and during the IPO that will benefit the company during its public company life. For example, legal counsel will advise the company on the establishment of its corporate governance structure, policies and procedures so that the company can operate effectively
and in compliance with applicable governance laws and regulations after the IPO. Legal counsel with strong public company experience can help the company set legal strategy so that it can continue to build value after the IPO, whether through mergers and acquisi- tions, additional financings or organic growth.
The company’s auditors are also key players on the company’s IPO team. The auditors will help the company comply with its disclosure obligations relating to financial state- ments and other financial information included in the registration statement. The SEC will assign accounting staff to review the company’s financial statements and the other financial aspects of the company’s disclosure, including the company’s accounting methods and poli- cies. The auditors may also serve as a liaison with the SEC’s accountants on accounting issues relating to the offering.
The registration process with the SEC will proceed more smoothly if the auditors have the knowledge needed to anticipate and address possible SEC comments on the company’s financial statements and related disclosures. Note that the auditor’s SEC or “public com- pany” review personnel will do a special review of the financial disclosures in the registra- tion statement before it is filed with the SEC. The company should obtain assurances from its auditors that this review personnel will be available and accessible during the IPO so that the review is timely and does not affect the IPO timeline.