What Happens During The IPO Process? (2026 Updated)

If your business has reached the point where you're thinking about an IPO, you're probably doing a lot right. But going public isn't just a "bigger fundraising round" - it's a major legal, financial and operational transformation.

The IPO process can feel like a moving train: advisers, regulators, investors, disclosures, deadlines - all while you're still trying to run the company day to day. Don't stress, though. Once you understand the typical stages (and why they matter), you can plan properly, avoid common pitfalls, and set yourself up for a smoother listing.

In this guide, we'll walk through what usually happens during the IPO process for UK companies in 2026, what you'll need to prepare, and where founders and directors often get caught out.

What Is An IPO (And Is It The Right Move For Your Business)?

An IPO (Initial Public Offering) is when a private company offers shares to the public for the first time and becomes listed on a public market. In the UK, that's usually through the London Stock Exchange (LSE) - commonly the Main Market or AIM (Alternative Investment Market).

At a high level, an IPO involves:

• Restructuring the company so it's ready for public ownership and scrutiny.
• Preparing a prospectus or admission document (depending on the market and structure) with detailed disclosures.
• Marketing the offer to institutional and/or retail investors.
• Pricing and allocating shares and completing the legal steps to admit the shares to trading.
• Operating as a listed company with ongoing reporting and governance obligations.

Why Do Companies Do An IPO?

The most common reasons include:

• Raising capital for growth, acquisitions, research and development, or debt reduction.
• Providing liquidity for existing shareholders (founders, early investors, employees with equity).
• Increasing credibility with customers and suppliers (public reporting can build trust).
• Creating an acquisition currency (using listed shares to buy other businesses).

When Is An IPO Not The Best Option?

An IPO isn't always the "next step". It can be the wrong fit if:

• your business isn't ready for ongoing public reporting and scrutiny;
• the costs and time of listing outweigh the benefits (adviser fees, audit costs, legal work, investor relations);
• you're not prepared to accept less privacy and more stakeholder management; or
• your governance and processes aren't mature enough to stand up to due diligence and continuous disclosure expectations.

Before you even get deep into IPO planning, it's worth pressure-testing your corporate foundations - including whether the company structure is set up correctly. For many businesses, that starts with basics like Register A Company in the right form (and ensuring your statutory registers and filings are up to date).

Pre-IPO Legal And Corporate Housekeeping (Where The Real Work Starts)

The "IPO process" usually starts long before the prospectus is drafted. In practice, the early stage is about making your company "IPO-ready" - meaning it can survive legal due diligence, meet regulatory standards, and look investable.

1) Appoint Your Core IPO Team

You'll typically build an IPO team including:

• Investment bank(s)/broker(s) (bookrunners) to manage the offer and investor process
• Lawyers (company counsel and often separate counsel for the banks)
• Reporting accountants/auditors
• PR / investor relations advisers
• Nominated adviser (Nomad) if you're listing on AIM

From a legal point of view, one of the key benefits of getting lawyers involved early is that you can fix issues before they become IPO-stopping problems (for example, missing IP assignments, unclear share rights, or messy historical consents).

2) Clean Up Your Group Structure

Many private companies have structures that work fine for early growth - but create headaches during an IPO.

Common housekeeping tasks include:

• Creating (or simplifying) a group structure so investors can understand what they're buying.
• Ensuring all subsidiaries and shareholdings are correctly documented and filed.
• Reviewing constitutional documents (articles of association) to ensure they suit a listed company.
• Updating shareholder arrangements so rights are clear and enforceable.

If you've historically relied on informal understandings between founders and early investors, this is the stage where those arrangements get formalised (or replaced). A well-drafted Shareholders Agreement can be a critical part of private-company governance pre-IPO - and it can also highlight what needs to change as you transition to a public company environment.

3) Get Board Processes And Governance Into Shape

Listed companies are expected to have stronger governance than private companies - not just on paper, but in practice. That usually means:

• clear decision-making authority and delegated limits;
• consistent board papers and meeting cycles;
• good recordkeeping (especially around major decisions and approvals); and
• committees (commonly audit, remuneration and nomination committees on the Main Market).

One simple but surprisingly important "IPO readiness" step is tightening how you document decisions. Proper Meeting Minutes can help show regulators, banks and investors that decisions were properly made and conflicts were managed appropriately.

4) Review Key Contracts (And Make Sure They'll Survive Scrutiny)

During an IPO, your major contracts will get reviewed by lawyers, accountants, and often disclosed (at least in summary form). Investors want to know your revenue is stable, your supplier chain is secure, and you're not one dispute away from a crisis.

Typical contracts that get attention include:

• customer and supplier agreements (especially "material contracts")
• distribution and licensing arrangements
• property leases
• loan facilities and security documents
• IP licences and assignments
• employment and incentive arrangements for key management

It also helps to be confident that your contracts are enforceable in the first place. If you're unsure, it's worth revisiting the basics of Legally Binding Contracts - because IPO diligence tends to uncover informal documents, missing signatures, unclear variation histories, and "handshake deals" that suddenly become high risk.

Due Diligence And Prospectus: What Gets Checked And What Gets Disclosed?

This is the stage many founders find most intense: the due diligence exercise (where everything is checked), and the disclosure exercise (where a lot of it ends up in formal IPO documents).

What Is Due Diligence In An IPO?

Due diligence is a structured review of the company's business, finances, and legal position. It's carried out so that:

• investors get accurate information;
• the company and its directors reduce the risk of misleading statements; and
• banks and advisers can stand behind the offering documents with confidence.

Legal due diligence commonly covers:

• Corporate: share capital, past issuances, option schemes, statutory registers, filings, constitutional documents
• Commercial: major customer and supplier contracts, terms and conditions, change-of-control clauses
• Employment: key hires, contractor arrangements, restrictive covenants, incentive plans, disputes
• Intellectual property: who owns the IP, assignments from founders/contractors, licensing arrangements
• Regulatory and compliance: sector-specific licences, anti-bribery controls, sanctions exposure (where relevant)
• Disputes: current or threatened litigation and how it's managed
• Property: leases, title issues (if you own property), rights to occupy

In practice, the "best" diligence outcome isn't "we found nothing" - it's "we found issues early enough to fix or disclose properly, without derailing the timetable".

Prospectus vs Admission Document (Main Market vs AIM)

The key IPO disclosure document depends on the market and the transaction structure. Broadly:

• Main Market: you're more likely to deal with a prospectus regime, FCA review/approval requirements (depending on the offer type), and the UK Listing Rules.
• AIM: you typically prepare an admission document (and work closely with a Nomad), with a different but still rigorous disclosure standard.

Either way, these documents commonly include:

• a description of the business and its strategy;
• risk factors (specific to the company and industry);
• financial information and reporting accountant statements;
• details of directors, corporate governance, and remuneration;
• material contracts and related party transactions;
• share capital, dilution and use of proceeds; and
• information about the offer, underwriting (if any), and timetable.

Director Responsibilities And Liability: Why Disclosure Needs To Be Taken Seriously

One of the biggest mindset shifts during an IPO is realising that disclosure isn't just "marketing" - it's a legal risk area. Directors can face liability if the prospectus/admission document includes misleading statements or omits required information.

This is why you'll see:

• extensive verification exercises (checking statements against evidence);
• careful review of risk factors (not generic wording); and
• tight controls around forward-looking statements and financial guidance.

Director remuneration and incentives also become much more visible during the IPO journey (and post-IPO). If you're reshaping pay structures ahead of listing, it's worth making sure you understand the legal and disclosure expectations around Director Remuneration.

Pricing, Marketing And Allocation: How Shares Actually Get Sold

Once the company is prepared and the disclosure documentation is coming together, the IPO moves into the "execution" phase: turning the listing plan into an actual capital raise and public market admission.

1) The Equity Story And Investor Marketing

The company and its banks will craft an equity story - essentially, a clear narrative about:

• what the business does and why it's defensible;
• how it makes money and how predictable that is;
• what growth looks like (and what will fund it); and
• what risks exist and how they're managed.

Marketing often includes management presentations and meetings with institutional investors (sometimes called roadshows).

Important: this stage also demands careful handling of inside information and market-sensitive disclosures (particularly as you get closer to admission). Your advisers will guide you on appropriate communications - but as a rule, you should assume everything you say can have regulatory consequences if it's inaccurate or selectively disclosed.

2) Setting The Offer Structure

The offering can be structured in different ways, such as:

• Primary issuance (new shares issued to raise funds for the company)
• Secondary sale (existing shareholders sell shares to new investors)
• A combination of both

You'll also decide:

• whether to include retail investors;
• whether the offer is underwritten;
• what lock-up arrangements apply (often founders agree not to sell for a period); and
• what the free float will be (percentage of shares held by the public).

3) Pricing And Allocation

Pricing is partly art, partly science. It typically involves feedback from investors during bookbuilding, market conditions, sector comparables, and how the company wants to position itself for post-IPO trading.

Allocation is where the shares are actually distributed to investors - and it matters more than many founders expect. The shareholder base you start with can influence:

• share price stability;
• future fundraising options;
• investor relations workload; and
• the company's governance expectations.

4) Final Transaction Documents

Behind the scenes, a lot of transaction documentation is negotiated and signed around this time, for example:

• underwriting agreement (if applicable)
• lock-in/lock-up agreements
• placing agreements
• relationship agreements (where a major shareholder is involved)
• board and shareholder resolutions approving the steps

Where there are pre-IPO investment steps happening alongside the listing (for example, cornerstone investors coming in early), the commercial terms are often captured in a Term Sheet before the long-form documents are finalised.

What Happens After Listing Day? Your Ongoing Obligations As A Public Company

A lot of people think the IPO finishes on "listing day". Realistically, listing day is the start of your life as a public company - with ongoing obligations that are very different to private company life.

1) Continuous Disclosure And Market Conduct Rules

Depending on your market and listing category, you'll need to comply with ongoing disclosure obligations. These can include:

• announcing inside information promptly (subject to limited exceptions for lawful delay);
• controls around insider lists and dealing restrictions;
• announcing major transactions and related party transactions (where required); and
• maintaining accurate, timely market communications.

The key practical point is this: you need internal processes for identifying market-sensitive matters early, escalating them, and documenting decisions - not scrambling after the fact.

2) Reporting And Governance

As a listed business, you'll often need:

• annual and interim reporting cycles with tight deadlines;
• an audit committee and appropriate financial controls;
• clear policies for conflicts of interest and related party dealings;
• remuneration governance (especially for executive directors); and
• shareholder engagement and AGM planning.

This is also where founders can feel the change most sharply: decisions that used to be quick and private may now require formal approvals, public announcements, and stakeholder management.

3) Employee Incentives And Share Plans

After an IPO, employee equity becomes both more valuable and more complex. You may need to revisit:

• option plans and vesting rules;
• employee communications around share dealing;
• tax considerations and reporting; and
• leaver provisions and good/bad leaver definitions.

There's no single "best" approach - what works depends on your growth strategy, headcount, and shareholder expectations. The important thing is to ensure the plan rules and contracts actually match what the business intends (and that they're administratively realistic).

4) Future Capital Raisings And Corporate Actions

Many newly listed companies raise further capital within 12?24 months, or explore corporate actions such as acquisitions, buybacks, or restructures. Being public can make some of these easier - but it also adds regulatory and governance layers.

The companies that handle this best are the ones that treat legal compliance as a core operating function, not a last-minute transaction checklist.

Key Takeaways

• An IPO is a business transformation as much as it is a fundraising event - it changes governance, disclosure, and how you make decisions.
• The earliest "IPO work" is usually corporate housekeeping: structure, share rights, board processes, and cleaning up key contracts.
• Due diligence and disclosure (prospectus/admission document) are central to the IPO process, and directors must take verification seriously.
• Pricing and allocation aren't just financial steps - they shape your shareholder base and your post-IPO stability.
• Listing day is the beginning of ongoing obligations, including continuous disclosure expectations, reporting cycles, and stronger governance.
• Getting the legal foundations right early can save you time, cost, and stress - and makes the company far more "investable" when it matters.

If you'd like help getting your business IPO-ready - from corporate restructuring and shareholder arrangements to contract clean-up and governance - you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.