IPOs. II. Getting the corporate house in order

Finding a good underwriter is important to the success of an initial public offering (IPO). The underwriter, an IPO's basic investor, is responsible for introducing the issuing company to the public and attracting enough additional investment to make the offering a success. An issuer's documents and records will be closely examined during the IPO process. US securities laws include strict disclosure requirements and provide penalties for misleading disclosures. Therefore, corporate records should be maintained on an ongoing basis. Issuers should carefully review their material agreements, such as those with suppliers, customers, creditors and landlords. An issuer should also review its intellectual property assets. A company must determine, with the help of legal counsel, whether to use trademark, trade secret, copyright or patent protection, or some combination of these methods, to protect its intellectual property rights. A company can be badly hurt if a court finds that it has infringed on another company's patent. In some cases, a patent owner can get an injunction that prevents an infringing company from making, selling or using its own products.