An initial public offering—also known as an IPO—is the process by which a privately-owned/privately-held company begins selling stock to outside investors, and transforms the company from a private company to a public company. Shares of public companies (also called publicly-traded companies) are usually traded on one of two stock exchanges—the New York Stock Exchange or the Nasdaq. A public company can raise money (capital) it needs by issuing and selling shares of its stock on the stock exchange on which it is listed. But public companies must comply with significant reporting and disclosure requirements established by the U.S. Securities and Exchange Commission that private companies do not have to comply with.

In Tennessee, as in other states, an initial public offering (IPO) is governed primarily by federal securities laws, particularly the Securities Act of 1933 and the Securities Exchange Act of 1934, which are enforced by the U.S. Securities and Exchange Commission (SEC). These laws require companies to file registration statements and prospectuses detailing financial and other significant information about the company, intended to protect investors by ensuring transparency. Once a company goes public, it must adhere to ongoing reporting obligations, including quarterly and annual financial reports (Forms 10-Q and 10-K), and disclosure of material events that shareholders should be aware of (Form 8-K). While state law is generally preempted by federal law in the area of securities regulation, Tennessee has its own securities laws, known as 'blue sky laws,' which are contained in the Tennessee Securities Act of 1980. These laws also require registration of securities and regulate the conduct of brokers, dealers, and investment advisors within the state. However, most registration requirements are coordinated with federal regulations through a streamlined system to ease the process for companies seeking to go public.