What Is an IPO? The Process, the Lawyers and the Timeline

Last updated: 22 October 2026. This guide explains how an initial public offering works in the United States, with a short comparison with the UK and EU listing rules. It is general information, not legal advice.

Short answer: An IPO, or initial public offering, is the first time a private company sells its shares to the general public, usually followed by a listing on a stock exchange. In the US the company registers the offering with the SEC, normally on Form S-1, then goes through SEC review, a roadshow and pricing. Kickoff to pricing often takes about four months.

Key takeaways

• An IPO turns a private company into a public one. The SEC does not judge whether the shares are a good investment; it checks that the disclosure is complete and the offering is registered.
• Most US companies now file their first drafts confidentially, but they must file publicly at least 15 days before the roadshow starts.
• Two legal teams run the deal: company counsel, who drafts the prospectus and handles the SEC, and underwriters’ counsel, who leads due diligence for the banks.
• Liability is strict. Under Section 11 of the Securities Act, the company is liable for material misstatements in its registration statement even without any proof of fault.

What is an IPO?

The SEC’s investor education site, Investor.gov, defines an IPO as “the first time a company offers its shares of capital stock to the general public”. Before the IPO, shares are held by founders, employees and private investors such as venture capital or private equity funds. After it, anyone with a brokerage account can buy them on an exchange.

An IPO usually does two things at once. It raises new money for the company (a primary offering), and it can let existing shareholders sell some of their stake (a secondary offering). Most deals are underwritten: a syndicate of investment banks agrees to buy the shares from the company at an agreed price and resell them to investors. The banks earn a fee, usually taken as a discount on that price.

Going public also brings permanent obligations. A listed US company has to file annual, quarterly and current reports with the SEC, meet exchange governance rules, and live with the scrutiny of public shareholders and the plaintiffs’ bar. That is why the legal work starts long before the shares are sold.

What are the steps in the IPO process?

Every deal is different, but most US IPOs follow the same sequence:

1. Readiness work. The company tidies its corporate records, upgrades financial reporting and internal controls, and builds a board that will meet exchange independence rules. PwC recommends planning over a one to two year period.
2. Choosing the banks and lawyers. The company picks lead underwriters (the bookrunners), company counsel and auditors. The banks appoint their own counsel.
3. Organisational meeting. The working group agrees the structure, the exchange, the timetable and who drafts what.
4. Drafting and due diligence. The team writes the registration statement on Form S-1, including the prospectus, risk factors, management’s discussion of results and audited financial statements. Underwriters’ counsel interviews management and reviews contracts, board minutes and litigation.
5. Confidential submission. Since 2017, the SEC has let any company submit a draft registration statement for nonpublic review. In March 2025 the SEC’s Division of Corporation Finance expanded those accommodations, and it still requires the company to file publicly “at least 15 days prior to any road show”.
6. SEC comments. The staff generally sends a first comment letter within 30 calendar days. The company answers each comment and files an amendment, often over several rounds.
7. Public filing and roadshow. Once comments are close to cleared, the company files publicly with a price range and management pitches the deal to institutional investors.
8. Pricing and allocation. The SEC declares the registration statement effective, the banks build the book of orders and the company and underwriters agree the final price. Investor.gov notes that the price is set by “a mix of market conditions, analysis and negotiation”.
9. Closing and trading. The underwriting agreement is signed, the shares start trading, and the company receives the proceeds at closing a few days later.

What do the lawyers do in an IPO?

An IPO is one of the most document-heavy deals in corporate law, and it is a core source of work for the capital markets groups at large firms. Our analysis of 3,034 law firm deal announcements shows how much of that work has shifted towards capital markets recently. Here is how the roles usually split:

Specialist advisers often join too. In the Wealthfront IPO, for example, Sidley acted for the company as regulatory counsel, a reminder that regulated businesses need sector lawyers alongside the core deal team. The work is also well paid: capital markets associates at large firms sit on the salary bands described in our guide to the Cravath scale, and our corporate lawyer salary guide compares that with in-house pay.

How long does an IPO take?

There is no fixed timetable, and market conditions can freeze a deal at any stage. Law firm Mintz gives a typical example: about six to eight weeks from kickoff to the first confidential submission, and roughly four months from kickoff to pricing, after 12 to 18 months of planning. The table sets out a common shape.

Smaller companies can move a little faster. A business with annual revenue below $1.235 billion usually counts as an “emerging growth company” under the JOBS Act, which lets it file two years of audited financial statements rather than three, give reduced executive pay disclosure and skip the auditor attestation on internal controls for up to five years.

What legal rules and liabilities apply to an IPO?

Three parts of US securities law shape almost every decision in an IPO.

• Section 5 and “gun-jumping”. Section 5 of the Securities Act of 1933 restricts offers before a registration statement is filed and sales before it is effective. That is why companies go quiet on publicity during the deal and why lawyers vet press interviews and marketing.
• Testing the waters. Rule 163B, adopted by the SEC in September 2019, lets any issuer talk to qualified institutional buyers and institutional accredited investors before or after filing to gauge demand. Retail investors cannot be approached this way.
• Section 11 liability. Under Section 11, investors can sue if the registration statement contained a material misstatement or omission when it became effective. The company is strictly liable. Directors, the officers who sign, the underwriters and experts such as auditors can avoid liability only by proving they carried out a reasonable investigation, which is the legal reason for all the due diligence.

Securities class actions after a share price drop often test those diligence files. A related area of practice is forensic review of the numbers; our guide to what a forensic accountant does explains how that evidence is built.

Insiders also face contractual limits. According to the SEC’s investor bulletin on IPOs, existing shareholders typically agree not to sell for a lock-up period, usually 180 days, so that a wave of sales does not hit the market straight after listing.

How is an IPO different in the UK and the EU?

The building blocks are similar: a prospectus, a regulator’s approval and banks that underwrite the offer. The rules have changed a lot in the past two years.

• UK listing rules. The FCA’s new UK Listing Rules came into force on 29 July 2024. As Skadden summarised, they replaced the premium and standard segments with a single category for equity shares in commercial companies, dropped mandatory shareholder votes on most large transactions and loosened limits on dual-class share structures.
• UK prospectus rules. From 19 January 2026 the UK Prospectus Regulation was replaced by the Public Offers and Admissions to Trading Regulations 2024 and a new FCA sourcebook. Listed companies can now issue up to 75% of their existing share capital, up from 20%, without a new prospectus.
• EU Listing Act. From 5 June 2026 EU equity prospectuses must follow a standardised format and are capped at 300 pages, excluding the summary and some other material.

For investors, the broader point is that these regimes all rely on disclosure and liability rather than a regulator’s view of the price, a theme covered in our piece on how law and regulation keep markets honest.

Is an IPO the only way to go public?

No. A company can also list through a direct listing, where existing shares start trading without an underwritten offering, or through a merger with a special purpose acquisition company (a de-SPAC). Each route has its own disclosure and liability rules, and the March 2025 SEC accommodations also allow nonpublic review in some de-SPAC deals. A traditional underwritten IPO remains the most common route for companies that want to raise new capital at the same time as listing.

Frequently asked questions

What does IPO stand for?

IPO stands for initial public offering. It is the first sale of a company’s shares to the general public, usually combined with a listing on a stock exchange such as the New York Stock Exchange, Nasdaq or the London Stock Exchange.

How long does the IPO process take?

A typical US IPO takes about four months from the kickoff meeting to pricing, but companies usually spend a year or more getting ready first. SEC review, market volatility and changes to the financial statements can all stretch the timetable.

Does the SEC approve an IPO?

No. The SEC reviews the registration statement for compliance with disclosure rules and declares it effective, but it does not approve the investment or judge whether the price is fair. Investors bear the risk of the shares.

What is the quiet period in an IPO?

It is the informal name for the restrictions on publicity under Section 5 of the Securities Act. Before and during the offering, the company must avoid statements that could be seen as marketing the shares outside the prospectus and permitted communications.

What is an IPO lock-up period?

A lock-up is a contract in which founders, employees and early investors agree not to sell their shares for a set time after the IPO. The SEC’s investor bulletin says lock-ups typically last 180 days.

Who pays the lawyers in an IPO?

The company pays its own counsel. Underwriters’ counsel is hired and paid by the banks, although the underwriting agreement often requires the company to reimburse some deal expenses, such as certain filing-related legal fees.

This article is general information about initial public offerings and is not legal or investment advice. Securities rules change often and differ between the US, the UK and the EU, so companies considering a listing should take advice from qualified capital markets counsel.